Following the implementation of the Credit Card Accountability, Responsibility, and Disclosure (CARD) Act on 22nd February 2010, there have been effects on the consumers and the cardholders. Whereas critics argue that the CARD Act may have cost the consumer a lot of money, in some way, there seems to be some relief to the same consumer. In regard to cost implication, there appears to be a notable increase in interest rates.
According to Cardratings.com study, there has been an increase in the annual percentage rates by averagely 2.1% from the end of 2008 to 2011 on new credit cards. Another cost element that has been witnessed is the ballooning of balance transfer fees. There is an increased trend in balance transfer as cardholders servicing credit card debts seek for lower APRs on their balance.
However, there seems to be an increase in the fees charged by card issuers on balance transfer. Card issuers have shifted from putting a cap on the maximum credit card balance transfer fee to charging a fee based on the balance being transferred. At the end of 2008, it was estimated that about 31% credit card offers were putting a cap on the card transfer fees but as at 2013, this percentage has significantly gone down and it is at 4 percent.
On the other hand, the percentages charged as fees on the amount being transferred has risen by 1.2 percent to settle at 3.3% compared to 2.1% in late 2008. What this means is that if you were transferring a credit card balance of 20,000 in 2008, it would have averagely cost you about $420. However, if you are transferring the same amount today, it would cost you a fee of about $660.
Despite these cost effects to the card holders, there are some benefits which these consumers are enjoying. One, there are fewer late fees and this is contributed to by the fact that the CARD Act made it a requirement by the card issuers to standardize billing cycles. Consumers are given not less than 21 days to settle their credit card bill.
From the effect of the standardization of billing cycles, the Consumer Financial Protection Bureau established out that there was a drop in monthly late fees by $474 million in the period between Jan and Nov 2010. What this means is that consumers could be paying less in late fees attached to their credit cards in the tune of $5 billion. This is certainly a big reduction in the amount of money that was being lost by the card holders in form of late fees.
Another benefit which has been noted is existence of lower over-the-limit-fees. Card issuers charge a fee when you clock and exceed the limit set for your credit card spending. Credit card issuers have made it an optional choice for you to exceed your set credit limit. This means that you willingly agree that you will be charged a certain amount of fee when you exceed the set credit limit.
Nonetheless, the fees have become quite competitive and are at lower levels compared to the period before the CARD Act was brought to the floor. According to observations made by Cardratings.com, the over-the-limit fees have now dropped to averagely about $14 compared to $33 in the period before the Act i.e. late 2008.
Last but not least, the CARD Act has led to fewer over-the-limit fees. Since the enactment and implementation of the CARD Act, many credit card companies stopped charging the over-the-limit fees because it was banned unless a cardholder willingly opts to such a program. This resulted to about 40% of credit cards with the opt-in program compared to about 95% of credit cards which were featuring the over-the-limit fees.
Showing posts with label Finance. Show all posts
Showing posts with label Finance. Show all posts
Monday, November 18, 2013
Missing Credit Card Payment may be the Worst Mistake You Make
Credit cards come with many benefits but all these gains can be overshadowed by a few missed payments. With your credit card, you can use it to make purchases and spend up to the credit limits you have been offered. Today, people are using these cards in areas like home improvements, travelling, purchases of groceries and other home stuffs as well as general shopping. But did you know that missing a few payments could plunge you into the most difficult financial problem you have ever encountered in your life?
There are numerous consequences of missing credit card balance payment and none of these penalties is either good. It is important that you pay credit card bills and balances in time. Even when you have money to pay your bills, you may accidentally fail to make the payment because you forget or you were too busy. This is never an excuse as to why you may make a late payment.
Paying your credit card bills must be a priority and not an option. Credit card bills can affect and taint your credit score for many years. When a person misses a payment, a late fee is placed on the account. This late payment fee becomes bad if it increases the balance of the card beyond the credit limit and this is because such as situation leads to additional fees.
Typically, the charges for late payments and over-the-balance charges will vary from one card issuer to another but generally they range between $25 and $35. If you miss payment, your interest rates could skyrocket to higher APRs. Card issuers will increase the APR due to a late payment and this can plunge you into difficulties. Whether it was caused by lack of funds or you forgot, you may end up paying 15 percent more on your initial APR.
If your APR was 16%, it means that with only one late payment, you may end up paying 31% on your credit balance. These charges continue to increase every time you make a late payment. Similarly, if you have a card with 0% APR intro rate, this privilege could be wiped out if you make a late payment. Your 0 percent APR could hike to 20.99% or higher because of that mistake.
Another impact you suffer when you make late payments is that they show up on your credit report. Usually a single late payment may not be a problem but a second or third late payment could raise a red flag. Late payments can make it more difficult for you to acquire loan facilities like mortgages, personal loans, and car loans. They also make it quite challenging to get new credit cards. Landlords also consider your credit report and may turn down your application because of the score.
If you do not make payment towards your credit card debt for several months, you risk your account being closed. This still damages your credit history and could have far reaching implications on your future borrowing ability. The more the payments you miss, the more you lower your FICO score and this means that you begin experiencing troubles with lending institutions. One of the reasons why people are going for the extremely high-interest rate payday loans is because they tainted their score with late payments and cannot now access loan facilities from banks or credit unions.
There are numerous consequences of missing credit card balance payment and none of these penalties is either good. It is important that you pay credit card bills and balances in time. Even when you have money to pay your bills, you may accidentally fail to make the payment because you forget or you were too busy. This is never an excuse as to why you may make a late payment.
Paying your credit card bills must be a priority and not an option. Credit card bills can affect and taint your credit score for many years. When a person misses a payment, a late fee is placed on the account. This late payment fee becomes bad if it increases the balance of the card beyond the credit limit and this is because such as situation leads to additional fees.
Typically, the charges for late payments and over-the-balance charges will vary from one card issuer to another but generally they range between $25 and $35. If you miss payment, your interest rates could skyrocket to higher APRs. Card issuers will increase the APR due to a late payment and this can plunge you into difficulties. Whether it was caused by lack of funds or you forgot, you may end up paying 15 percent more on your initial APR.
If your APR was 16%, it means that with only one late payment, you may end up paying 31% on your credit balance. These charges continue to increase every time you make a late payment. Similarly, if you have a card with 0% APR intro rate, this privilege could be wiped out if you make a late payment. Your 0 percent APR could hike to 20.99% or higher because of that mistake.
Another impact you suffer when you make late payments is that they show up on your credit report. Usually a single late payment may not be a problem but a second or third late payment could raise a red flag. Late payments can make it more difficult for you to acquire loan facilities like mortgages, personal loans, and car loans. They also make it quite challenging to get new credit cards. Landlords also consider your credit report and may turn down your application because of the score.
If you do not make payment towards your credit card debt for several months, you risk your account being closed. This still damages your credit history and could have far reaching implications on your future borrowing ability. The more the payments you miss, the more you lower your FICO score and this means that you begin experiencing troubles with lending institutions. One of the reasons why people are going for the extremely high-interest rate payday loans is because they tainted their score with late payments and cannot now access loan facilities from banks or credit unions.
Why you are not Really Safe with Minimum Credit Card Payments?
If you have a balance in your credit card, you would better settle it before you find yourself in the most difficult situation. In one case, a 62 year old Francine Bostick who is a custodial manager living in Manhattan, Kansas, was faced with a tormenting experience with credit card debt. Francine Bostick and her husband James aged 74, together found themselves in a more than $120,000 credit card debt.
It took them more than 5 years to come out of their indebtedness situation. Because of the cheap credit available through these cards, Francine did not make certain considerations in her spending habits. She did not think twice about aspects like buying home appliances or even helping her children who have now grown to adults to meet their expenses. However, one time, things changed so fast and from one sweet moment of life, it became the turning point to a life full of desperation, fear, and discontent.
Francine said that they thought as long as they paid the minimum amount on their credit, everything was fine. When her husband developed dementia, this is when things turned haywire. As she was dealing with this serious health condition of her husband, on the other side, the card lenders began raising the required minimum payment.
Ms. Bostick points out some of the things she did which she thought were okay but they were not. She reckons that one mistake she might have made is being too supportive to her children even in situations where it was not necessary. By showing love through giving materials things, she used her credit card to help her adult children and overcompensated them in financial needs.
She tells of one instance in which her daughter was in college and she did not have insurance to cover her medical bills. She went on to help her meet the medical insurance needs. Ms. Bostick also laments that she sometimes bought stuff for her kids even when they did not ask for them. Whereas there is nothing bad about helping your children, the main point is; did she have the resources to keep supporting them even at the adult age?
Certainly, she overinvested in her children something that led to draining off of her credit card money. According to Eleanor Blayney, a certified financial planner and a consumer advocate at CFP Board (a nonprofit organization advocating for professional planning) she articulated the situation Ms. Bostick was facing as a confluence of events in her life.
In an effort to help in educating their children, parents are adding their indebtedness in the more than $1 trillion student loan debt. In a report presented by the New York Federal Reserve in 2012, it established that out of the student loan borrowers, about 5.3 percent were persons aged about 60 and above. This means that parents were taking the responsibility to borrow for their children’s education thus putting themselves into risks of being accountable for those credit card loans in future.
It took them more than 5 years to come out of their indebtedness situation. Because of the cheap credit available through these cards, Francine did not make certain considerations in her spending habits. She did not think twice about aspects like buying home appliances or even helping her children who have now grown to adults to meet their expenses. However, one time, things changed so fast and from one sweet moment of life, it became the turning point to a life full of desperation, fear, and discontent.
Francine said that they thought as long as they paid the minimum amount on their credit, everything was fine. When her husband developed dementia, this is when things turned haywire. As she was dealing with this serious health condition of her husband, on the other side, the card lenders began raising the required minimum payment.
Ms. Bostick points out some of the things she did which she thought were okay but they were not. She reckons that one mistake she might have made is being too supportive to her children even in situations where it was not necessary. By showing love through giving materials things, she used her credit card to help her adult children and overcompensated them in financial needs.
She tells of one instance in which her daughter was in college and she did not have insurance to cover her medical bills. She went on to help her meet the medical insurance needs. Ms. Bostick also laments that she sometimes bought stuff for her kids even when they did not ask for them. Whereas there is nothing bad about helping your children, the main point is; did she have the resources to keep supporting them even at the adult age?
Certainly, she overinvested in her children something that led to draining off of her credit card money. According to Eleanor Blayney, a certified financial planner and a consumer advocate at CFP Board (a nonprofit organization advocating for professional planning) she articulated the situation Ms. Bostick was facing as a confluence of events in her life.
In an effort to help in educating their children, parents are adding their indebtedness in the more than $1 trillion student loan debt. In a report presented by the New York Federal Reserve in 2012, it established that out of the student loan borrowers, about 5.3 percent were persons aged about 60 and above. This means that parents were taking the responsibility to borrow for their children’s education thus putting themselves into risks of being accountable for those credit card loans in future.
Top 5 Home Improvement Credit Cards to Pay Attention
With the spending on home improvements expected to go up reaching $110 billion in 2013, this means that businesses in the construction and building industry will expect increased returns. Credit cards are not taking these market projections for granted and they have devised reward card programs aimed at helping the consumers save money and enjoy other perks. With the home improvement cards, cardholders can get discounts, airline miles, points, cashrebates and other perks whenever they make purchases on building and construction materials and supplies.
Credit cards are ideal for those homeowners or real estate owners who spend occasionally on home improvements and remodelling. If you have long term home renovation projects, you may need one or more of these cards. Some of the cards you get in the market include;
1. Sears Gold MasterCard
Sear is major supplier of home improvement materials. Consumers can get many of the materials and supplies they need from Sears store. In order to help its customers benefit from the purchases they make, the Store offers Sears Gold MasterCard. This is a reward credit card that enables the holders to earn points which can be redeemed for Sears gift cards.
2. Chase Home Improvement Rewards Credit Card
This card is designed for home renovations and for the first 6 months, the card offers 0% APR. This means that you can pay your balance at zero interest in the first six months. With this card, every dollar you spent on materials and supplies earns you 3 points. You can redeem your points for cashrebates or rewards. This means that you can get 3% cash back on all your purchases towards home improvement.
3. Home Depot Consumer Credit Card
This card offers no payment and interest within the first 6 months but this is subject to opening an account and spending at least $299. The card is ideal if you want to purchase all your materials and supplies from one store. After the intro period, the interest rates shoot to 17.99% and 26.99% depending on your credit score.
4. Home Advantage MasterCard
Issued by Bank of America, Home Advantage MasterCard has a unique way of assisting consumers who are doing their home improvements and renovations. The card helps you pay down your mortgage loan. With this card, for event dollar you spend, you earn one point. When you earn $5,000 points, you can redeem them for cash but this amount goes directly to repayment of your mortgage. This is a good card for those with mortgage loans and excellent credit score.
5. Discover More
You can save money on home renovations by using cashback cards. Discover More is a card designed to help homeowners and real estate owners to save money on home renovations. This card starts with a 0 percent interest rate. It also offers 5 percent cashrebate on spending towards home improvements, department stores, restaurants and gas stations. Other purchases will earn you 1 percent cashrebate.
Other cards you may consider are Home Projects Visa, Lowes Project Card, and the Menards Big Credit Card. Because of the increasing number of home improvement cards, you need to select wisely the right card for you. Check on the different perks offered by each card and your spending pattern. Do not be enticed to spend more in order to gain rewards.
Credit cards are ideal for those homeowners or real estate owners who spend occasionally on home improvements and remodelling. If you have long term home renovation projects, you may need one or more of these cards. Some of the cards you get in the market include;
1. Sears Gold MasterCard
Sear is major supplier of home improvement materials. Consumers can get many of the materials and supplies they need from Sears store. In order to help its customers benefit from the purchases they make, the Store offers Sears Gold MasterCard. This is a reward credit card that enables the holders to earn points which can be redeemed for Sears gift cards.
2. Chase Home Improvement Rewards Credit Card
This card is designed for home renovations and for the first 6 months, the card offers 0% APR. This means that you can pay your balance at zero interest in the first six months. With this card, every dollar you spent on materials and supplies earns you 3 points. You can redeem your points for cashrebates or rewards. This means that you can get 3% cash back on all your purchases towards home improvement.
3. Home Depot Consumer Credit Card
This card offers no payment and interest within the first 6 months but this is subject to opening an account and spending at least $299. The card is ideal if you want to purchase all your materials and supplies from one store. After the intro period, the interest rates shoot to 17.99% and 26.99% depending on your credit score.
4. Home Advantage MasterCard
Issued by Bank of America, Home Advantage MasterCard has a unique way of assisting consumers who are doing their home improvements and renovations. The card helps you pay down your mortgage loan. With this card, for event dollar you spend, you earn one point. When you earn $5,000 points, you can redeem them for cash but this amount goes directly to repayment of your mortgage. This is a good card for those with mortgage loans and excellent credit score.
5. Discover More
You can save money on home renovations by using cashback cards. Discover More is a card designed to help homeowners and real estate owners to save money on home renovations. This card starts with a 0 percent interest rate. It also offers 5 percent cashrebate on spending towards home improvements, department stores, restaurants and gas stations. Other purchases will earn you 1 percent cashrebate.
Other cards you may consider are Home Projects Visa, Lowes Project Card, and the Menards Big Credit Card. Because of the increasing number of home improvement cards, you need to select wisely the right card for you. Check on the different perks offered by each card and your spending pattern. Do not be enticed to spend more in order to gain rewards.
Why Homeowners Are Using Credit Cards To Finance Home Improvement?
There is a growing trend in financing home improvements with credit card funds. Credit cards are used to provide credit to users but the balances these cards carry can attract high interest rates. Credit card debt seems to be the most prevalent debt problems within consumers in U.S. surpassing the mortgage debts and student loan debts. However, with these credit card debt problems, there seems to one group of consumers that is determined to spend hundreds of thousands of dollars through their credit cards to carry out home improvements.
According to numbers released in a study by Harvard University Joint Center for Housing, it showed that homeowners spent more on home improvements in the year 2012 by 9 percent. Home improvement budget estimates are set to reach $110 billion in the year 2013 and this shows that there is a huge market for money to be spend out there.
Card issuers are targeting this market and they have come up with reward programs that help homeowners save money on their home improvement projects. Homeowners need to determine the right funding means to use to finance their home improvement projects. They may use cash, personal loans, equity line of credit (HELOC), FHA Title I remodeling loan, contractor refinancing, or credit cards.
Whether you are doing an occasional home repair or a long term home remodeling project, the home improvement credit cards may be an ideal choice to fund your project. These cards are essential for those people who have regular purchases in their home improvements and building materials. This means that purchases of products like hardware, lumber, paint, wallpapers, cements, plumbing fixtures, and the like will get cash rebates or other forms of perks.
Credit cards are a good option in these kinds of projects because they have no closing costs, loan fees, home appraisal, credit check, and no need to use your house as collateral for the credit. Depending on the card you are using, you could earn discounts on building and construction materials and supplies, cashback, points, and airline miles.
However, not all persons may need to use these cards. There are the negative aspects of using credit cards to finance home remodeling and they include the possibility of increasing your debt load, high APRs which are as twice the interest rates offered on mortgages and home equity. The interest on these cards is not tax deductable and this is another disadvantage. Another problem is that running the card could lead to low credit score especially when you begin to experience late payment of the credit card balances.
You may also risk being subjected to spending limit cuts. However, the home renovation credit cards provides you with a credit amount that you can comfortably pay off fast especially the small projects or ongoing projects that will need regular spending on materials and supplies.
Many people are most likely to underestimate how long they will take to carry a loan and this can result to problems when using credit cards. As a senior researcher with the Center for Responsible Lending, Josh Frank points out, most people underestimate how long they will take to settle their loans and when the worst happens and they miss a few payments, the penalties can plunge them into financial pitfalls. Credit card late payments can attract interest rates of up to 35 percent.
According to numbers released in a study by Harvard University Joint Center for Housing, it showed that homeowners spent more on home improvements in the year 2012 by 9 percent. Home improvement budget estimates are set to reach $110 billion in the year 2013 and this shows that there is a huge market for money to be spend out there.
Card issuers are targeting this market and they have come up with reward programs that help homeowners save money on their home improvement projects. Homeowners need to determine the right funding means to use to finance their home improvement projects. They may use cash, personal loans, equity line of credit (HELOC), FHA Title I remodeling loan, contractor refinancing, or credit cards.
Whether you are doing an occasional home repair or a long term home remodeling project, the home improvement credit cards may be an ideal choice to fund your project. These cards are essential for those people who have regular purchases in their home improvements and building materials. This means that purchases of products like hardware, lumber, paint, wallpapers, cements, plumbing fixtures, and the like will get cash rebates or other forms of perks.
Credit cards are a good option in these kinds of projects because they have no closing costs, loan fees, home appraisal, credit check, and no need to use your house as collateral for the credit. Depending on the card you are using, you could earn discounts on building and construction materials and supplies, cashback, points, and airline miles.
However, not all persons may need to use these cards. There are the negative aspects of using credit cards to finance home remodeling and they include the possibility of increasing your debt load, high APRs which are as twice the interest rates offered on mortgages and home equity. The interest on these cards is not tax deductable and this is another disadvantage. Another problem is that running the card could lead to low credit score especially when you begin to experience late payment of the credit card balances.
You may also risk being subjected to spending limit cuts. However, the home renovation credit cards provides you with a credit amount that you can comfortably pay off fast especially the small projects or ongoing projects that will need regular spending on materials and supplies.
Many people are most likely to underestimate how long they will take to carry a loan and this can result to problems when using credit cards. As a senior researcher with the Center for Responsible Lending, Josh Frank points out, most people underestimate how long they will take to settle their loans and when the worst happens and they miss a few payments, the penalties can plunge them into financial pitfalls. Credit card late payments can attract interest rates of up to 35 percent.
3 Best 0%Balance Transfer Credit Cards
If you have an existing credit card debt that attracts high interest rates, you can transfer that balance to another card with lower interest rate for easy repayment. Credit card debt can be quite difficult to manage especially when you miss payment and the interest rates have sky rocketed. High interest rates can increase the overall amount of payback meaning that you will have to struggle to repay. There are people who have spent years repaying their credit cards because of mistakes they made such as late payment.
Whereas a first late payment will not attract a penalty, if you experience a second and third late payment, things may turn haywire. The worse thing with credit cards is that the penalties or hiked interest rates are so large that they make a very big impact on your repayment. A single late repayment can attract a hike of up to 15 percent in interest and this means that if you were paying 14.9 percent APR, this rate shoots up to 29.9 percent.
A second late payment can make you experience the worse scenarios of credit card debt repayment because the amount accrued increases significantly. However, with the 0 percent balance transfer, you can manage to move your balance from one card to another without suffering a lot of costs. If you have existing credit card debt, you may consolidate it in one card with a 0 percent interest on the balance for a certain period of time. The below cars are some of the best 0 percent balance transfer cards;
Citi Simplicity MasterCard
This card offers 0 percent introductory APR on balance transfers, which runs for 18 months. This means that within those 18 months, your balance attracts no interest rates. After the intro period, the APR shoots to about 12.99 and 21.99 percent. When making the transfer, you pay only 3 percent of the amount you are transferring or a minimum of $5 depending on which situation best suits you.
This card has also 0 percent intro APR on purchase for the same period of 18 months. However, one of the cons with this card is that it does not have a reward program. Cardholder seeking for balance transfer should not emphasize much on the rewards than the ARP on balance transfer and the fee charged.
Discover It
This card offers 18 months balance transfer and this is a time limited offer, which may not last for long. When you sign up for the card, you can transfer your balance with a 0 percent intro APR for a period of 18 months. This means that during this time, you will be paying your existing card debt at zero interest. However, when the period is over, the rates hike to normal rates of between 10.99% – 20.99% depending on your credit score. There is also a 3 percent transfer fee based on your balance.
Citi Diamond Preferred card
This offers a 0 percent introductory APR on your balance and this rate runs for 18months. During that one and half years, you will be paying zero interest rate on your balance. You can capitalize on this zero intro rate period to repay your balance without any interest. When the intro APR period is over, the card attracts a rate of 11.99 to 21.99 APR depending on your credit score.
There is also a 3 percent balance transfer fee or a $5 minimum fee whichever is applicable. In addition to the balance transfer, the card offers other perks like retail purchase protection, private pass and price protection. However, this card does not have a reward program meaning that you will not get redeemable points for cashbacks or other perks.
Whereas a first late payment will not attract a penalty, if you experience a second and third late payment, things may turn haywire. The worse thing with credit cards is that the penalties or hiked interest rates are so large that they make a very big impact on your repayment. A single late repayment can attract a hike of up to 15 percent in interest and this means that if you were paying 14.9 percent APR, this rate shoots up to 29.9 percent.
A second late payment can make you experience the worse scenarios of credit card debt repayment because the amount accrued increases significantly. However, with the 0 percent balance transfer, you can manage to move your balance from one card to another without suffering a lot of costs. If you have existing credit card debt, you may consolidate it in one card with a 0 percent interest on the balance for a certain period of time. The below cars are some of the best 0 percent balance transfer cards;
Citi Simplicity MasterCard
This card offers 0 percent introductory APR on balance transfers, which runs for 18 months. This means that within those 18 months, your balance attracts no interest rates. After the intro period, the APR shoots to about 12.99 and 21.99 percent. When making the transfer, you pay only 3 percent of the amount you are transferring or a minimum of $5 depending on which situation best suits you.
This card has also 0 percent intro APR on purchase for the same period of 18 months. However, one of the cons with this card is that it does not have a reward program. Cardholder seeking for balance transfer should not emphasize much on the rewards than the ARP on balance transfer and the fee charged.
Discover It
This card offers 18 months balance transfer and this is a time limited offer, which may not last for long. When you sign up for the card, you can transfer your balance with a 0 percent intro APR for a period of 18 months. This means that during this time, you will be paying your existing card debt at zero interest. However, when the period is over, the rates hike to normal rates of between 10.99% – 20.99% depending on your credit score. There is also a 3 percent transfer fee based on your balance.
Citi Diamond Preferred card
This offers a 0 percent introductory APR on your balance and this rate runs for 18months. During that one and half years, you will be paying zero interest rate on your balance. You can capitalize on this zero intro rate period to repay your balance without any interest. When the intro APR period is over, the card attracts a rate of 11.99 to 21.99 APR depending on your credit score.
There is also a 3 percent balance transfer fee or a $5 minimum fee whichever is applicable. In addition to the balance transfer, the card offers other perks like retail purchase protection, private pass and price protection. However, this card does not have a reward program meaning that you will not get redeemable points for cashbacks or other perks.
Choose the Right Reward Credit Card and Save Money
With the wide range of credit cards in the market, you need to watch out for the card you choose. If you make the wrong choice, this could cost you a lot of money. With the average credit card debt standing at a distressing $7,122 as of march 2013, it is certain that people need to use their cards wisely. The average household credit card debt was recorded at $15,266 in the same period and this shows that the American debt profile could only be getting worse. Diving deep into the statistics, records show that American consumers owe $11.31 trillion in debt and of this $850.9 billion is a credit card debt.
Choosing the right reward credit card can help cardholders minimize the bottlenecks that come with use of these cards. If you need a general card and not a specific card like airline reward credit card, it is good that you forfeit the higher reward rates offered as this will provide ubiquity and flexibility. In the same way, if your card carries a balance, you need not go for a card which attracts high rewards because most often the APR will be high.
In most cases, low interest cards will save you more money. There are a number of considerations you should make when choosing a card and they include the reward redemption and time horizon. It is essential that you know exactly what you get from every dollar you spend through a reward card program. Although you will have the exchange rate for redeeming your points calculated for you, it is important to know how much you will spend and how long you will fly.
For example, if you have the Discover Miles card, you can only redeem 0.5 points for every 1 cent in cash. Many airline credit cards will offer you sign up bonus that may be able to amount to $800 but then again they will charge you an annual fee. It is important that you do your calculations properly.
You need to determine if you will get value out of the card. The more you hold the card, the more you will pay in annual fee and this means that your annual fees may outweigh the sign up bonus. You need to examine the time horizon in which you intend to hold and use the card for optimal perks. Otherwise, some of the perks you are offered may be taken up the annual fees.
For example, if you get a reward card with a $150 sign up bonus and the same card attracts an annual fee of $75, it means that in two years, the annual fee with surpass the bonus. If you intend to hold the card for three or four years, then it is better to consider another card.
There are limitations on certain cards, which you need to watch out for. Examining reward caps can help you in optimizing the perks. Some cards may limit the rewards to certain period for example, quarterly for the Chase Freedom card and year for the CitiForward. Another thing you need to check on is the bonus category. Many of the cards will not offer flat reward rates and this means that they will offer something extra. You may get extra rewards points for groceries and gas purchases.
Some of the cards may have rotating reward categories within certain period. They may be offering a bonus of a particular category like grocery for three months, and for other three months they offer rewards on gas category. You should check how such bonus can benefit you and if they will affect your spending pattern or not. Always ensure that you are not enticed to spend more in order to gain more redeemable points. You need to follow your normal spending pattern.
Choosing the right reward credit card can help cardholders minimize the bottlenecks that come with use of these cards. If you need a general card and not a specific card like airline reward credit card, it is good that you forfeit the higher reward rates offered as this will provide ubiquity and flexibility. In the same way, if your card carries a balance, you need not go for a card which attracts high rewards because most often the APR will be high.
In most cases, low interest cards will save you more money. There are a number of considerations you should make when choosing a card and they include the reward redemption and time horizon. It is essential that you know exactly what you get from every dollar you spend through a reward card program. Although you will have the exchange rate for redeeming your points calculated for you, it is important to know how much you will spend and how long you will fly.
For example, if you have the Discover Miles card, you can only redeem 0.5 points for every 1 cent in cash. Many airline credit cards will offer you sign up bonus that may be able to amount to $800 but then again they will charge you an annual fee. It is important that you do your calculations properly.
You need to determine if you will get value out of the card. The more you hold the card, the more you will pay in annual fee and this means that your annual fees may outweigh the sign up bonus. You need to examine the time horizon in which you intend to hold and use the card for optimal perks. Otherwise, some of the perks you are offered may be taken up the annual fees.
For example, if you get a reward card with a $150 sign up bonus and the same card attracts an annual fee of $75, it means that in two years, the annual fee with surpass the bonus. If you intend to hold the card for three or four years, then it is better to consider another card.
There are limitations on certain cards, which you need to watch out for. Examining reward caps can help you in optimizing the perks. Some cards may limit the rewards to certain period for example, quarterly for the Chase Freedom card and year for the CitiForward. Another thing you need to check on is the bonus category. Many of the cards will not offer flat reward rates and this means that they will offer something extra. You may get extra rewards points for groceries and gas purchases.
Some of the cards may have rotating reward categories within certain period. They may be offering a bonus of a particular category like grocery for three months, and for other three months they offer rewards on gas category. You should check how such bonus can benefit you and if they will affect your spending pattern or not. Always ensure that you are not enticed to spend more in order to gain more redeemable points. You need to follow your normal spending pattern.
Best Reward Credit Cards for the Frequent Traveler
If you are spending fairly in your travel, you need a reward card that can help you save money in your trip expenses. Travelling from one destination to another can be costly and with the use of the reward card, you can garner points that you can use to redeem for perks like air tickets and hotel rooms. The hotel and airline credit cards are a good way of earning points that can be redeemed for interesting perks. According to DailyMarket.com, one card that travelers can opt for is the Gold Delta SkyMiles card issued by American Express.
This card gives the traveler a bonus of 30,000 miles when he or she spends over $500 within the first three months of issuance of the card. These accrued miles can be used to pay for tickets whether full or partially meaning that you will save significantly in your travel expenses if you meet these spending limits. In addition, travelers can earn 2 miles in every dollar that is spent on any purchases in Delta and this means that you will accrue your mileage fast.
However, on all other purchases, you are able to earn 1 mile in every dollar you spend. The good thing with this card is that your miles will never expire even if you stay for a long time without travelling. The Gold Delta SkyMiles card has 0 percent annual fee in the first year.
Another card which travelers should eye for is the Capital One Venture Reward credit card. This card enables a traveler to earn 10,000 after spending $1000 in purchase on the first three months of issuance of the card. In addition, the card holder also benefits from a 2 miles perk or award for every dollar spend on other purchases. This gives the traveler an opportunity to increase the mileage bonus pretty fast. However, with this card, you will pay an annual fee of $59 but this is waived for the first year of issuance of the card.
Travelers can also consider Blue Sky card issued by American Express. This card does not attract an annual fee and cardholders can earn one point for every dollar they spend on purchases. This card earns you 33 percent more points when compared to other cards and you can redeem 7,500 points for a statement credit worthy $100 for use in your travel expenses. Other cards will allow you to redeem $10,000 points after meeting a specific spending. With this card, your points will not expire. The 7,500 points are awarded if you spend $1000 in the first 3 months.
When choosing the reward cards, you need to check on aspects like annual fee, the limits of the amount you have to spend to gain the points and how fast the program allows you to accrue points. If you do not travel frequently and the card program requires you to spend a large amount of dollars for you to be rewarded with points within a short time, this may be challenging for you. In addition, you also need to check on the expiry of the points. It is better to choose a card that does not allow the points to expire.
This card gives the traveler a bonus of 30,000 miles when he or she spends over $500 within the first three months of issuance of the card. These accrued miles can be used to pay for tickets whether full or partially meaning that you will save significantly in your travel expenses if you meet these spending limits. In addition, travelers can earn 2 miles in every dollar that is spent on any purchases in Delta and this means that you will accrue your mileage fast.
However, on all other purchases, you are able to earn 1 mile in every dollar you spend. The good thing with this card is that your miles will never expire even if you stay for a long time without travelling. The Gold Delta SkyMiles card has 0 percent annual fee in the first year.
Another card which travelers should eye for is the Capital One Venture Reward credit card. This card enables a traveler to earn 10,000 after spending $1000 in purchase on the first three months of issuance of the card. In addition, the card holder also benefits from a 2 miles perk or award for every dollar spend on other purchases. This gives the traveler an opportunity to increase the mileage bonus pretty fast. However, with this card, you will pay an annual fee of $59 but this is waived for the first year of issuance of the card.
Travelers can also consider Blue Sky card issued by American Express. This card does not attract an annual fee and cardholders can earn one point for every dollar they spend on purchases. This card earns you 33 percent more points when compared to other cards and you can redeem 7,500 points for a statement credit worthy $100 for use in your travel expenses. Other cards will allow you to redeem $10,000 points after meeting a specific spending. With this card, your points will not expire. The 7,500 points are awarded if you spend $1000 in the first 3 months.
When choosing the reward cards, you need to check on aspects like annual fee, the limits of the amount you have to spend to gain the points and how fast the program allows you to accrue points. If you do not travel frequently and the card program requires you to spend a large amount of dollars for you to be rewarded with points within a short time, this may be challenging for you. In addition, you also need to check on the expiry of the points. It is better to choose a card that does not allow the points to expire.
Discover It …the Best Balance Transfer Credit Card 2013
Balance transfers are used to help cardholders pay off their debt. If you have accumulated a lot of debt on your credit card, you may consider 0 balance transfer or low rate balance transfer cards. With the average annual percentage rate for credit cards being around 16 percent, this rate can be difficult to pay down and this is because the interest charges continuously thus adding to the principal. The situation becomes worse when you miss payments as the rates sky rocket.
The Discover It card offers generous cashback and also a balance transfer offer of 18 months. You can transfer your balance to this card with an introductory APR rate of 0 percent that lasts for 18 months. This means that during these 18 months, you are not charged interest rate on the card. This will allow you comfortably transfer your balance and have enough time to prepare to clear the balance.
When choosing an introductory rate, you need to evaluate the amount you have accrued on your card and how sooner you can repay. Some cards that allow 0 percent intro rates are likely to place higher interest rates after the introductory period. This means that if you have the financial ability to repay your debt within a short time, you may need to choose a card that has a lower interest intro rate but which offers a lower APR after the intro period.
With Discover It, the variable purchases APR applies and as at the time of writing this review (March 2013), the card was attracting variable purchase rate of 10.99 to 20.99 percent. The card also has a 0 percent introductory APR on purchases of products for 6 months. With this card, you can also get 5 percent cashback at restaurants and movies through the month of March 2013 for up to $1,500 in total of purchases made. All other purchases attract 1 percent cashback. If you would like a credit card deal that promises handsome cashback perks, then this may be a good option.
In addition, this card has no annual fees meaning that you will not pay annual maintenance fees. Similarly, there is no fee charged on overlimit. Moreover, there is no fee for your first late payment and this means that although you may not be charged for your first late payment, you do not need to make your payment late. This can give a bad impression and could affect your negotiation power whenever you have problems making payments within the stipulated date.
Last but not least, the Discover It card does not charge foreign transaction fees. If you are struggling with a current credit card balance that attracts high interest rates, you may consider switching or transferring your debt to Discover It reward card. This will help you manage your repayment plan. The 0 percent introduction APR running for 18 months can give you sufficient time to plan on how to clear the balance. However, this card may be a good option if you feel that you cannot clear the balance in the short term.
The Discover It card offers generous cashback and also a balance transfer offer of 18 months. You can transfer your balance to this card with an introductory APR rate of 0 percent that lasts for 18 months. This means that during these 18 months, you are not charged interest rate on the card. This will allow you comfortably transfer your balance and have enough time to prepare to clear the balance.
When choosing an introductory rate, you need to evaluate the amount you have accrued on your card and how sooner you can repay. Some cards that allow 0 percent intro rates are likely to place higher interest rates after the introductory period. This means that if you have the financial ability to repay your debt within a short time, you may need to choose a card that has a lower interest intro rate but which offers a lower APR after the intro period.
With Discover It, the variable purchases APR applies and as at the time of writing this review (March 2013), the card was attracting variable purchase rate of 10.99 to 20.99 percent. The card also has a 0 percent introductory APR on purchases of products for 6 months. With this card, you can also get 5 percent cashback at restaurants and movies through the month of March 2013 for up to $1,500 in total of purchases made. All other purchases attract 1 percent cashback. If you would like a credit card deal that promises handsome cashback perks, then this may be a good option.
In addition, this card has no annual fees meaning that you will not pay annual maintenance fees. Similarly, there is no fee charged on overlimit. Moreover, there is no fee for your first late payment and this means that although you may not be charged for your first late payment, you do not need to make your payment late. This can give a bad impression and could affect your negotiation power whenever you have problems making payments within the stipulated date.
Last but not least, the Discover It card does not charge foreign transaction fees. If you are struggling with a current credit card balance that attracts high interest rates, you may consider switching or transferring your debt to Discover It reward card. This will help you manage your repayment plan. The 0 percent introduction APR running for 18 months can give you sufficient time to plan on how to clear the balance. However, this card may be a good option if you feel that you cannot clear the balance in the short term.
How to Maximize the use of Credit Card Rewards
There is growing trend on use of credit cards and one thing that has contributed to this phenomenon is the rewards programs being offered by the card issuers. In order to meet the increasing need for use of the cards, the issuers have developed different card reward programs that match different user needs. You will virtually get reward credit cards for different shopping and travel needs including hotel rooms, grocery store purchases, gasoline, restaurants, foods and cashrebate programs.
A new trend has been observed where some spenders have devised ways to use their purchasing power to gain on the perks offered by the cards. In a report by Wall Street Journal, homeowners planning to construct or remodel their homes are putting staggering amount of over $100,000 on their reward cards. The use of these cards should be done correctly otherwise with the large number of cards in the market; it may be confusing to choose the right one.
Before you choose a card, you need to evaluate the reason why you need it. One major aspect you need to consider is your spending habit. You need to check where your money goes to including travel and purchase of food stuffs. If you are business traveler, it is certain that you want to save money in your trip expenses. Using credit card rewards can help you garner points which you can redeem for airline tickets or hotel stay.
Hotel and airline reward cards enable you earn points when you stay in designated hotel facilities or fly on certain airlines. These cards also give you redeemable points in your day-to-day spending, which you can use for hotel rooms or air tickets. For example, Gold Delta Sky Miles credit card issued by America Express offers you a 30,000 bonus miles but this is subject to spending $500 in your first three months of use.
If you are a spender who is trying to make ends meet, perhaps cash back card programs could be a good option. Your spending habits will guide you on which card program to go for. You should consider where you will use the card and how you plan to use it. The need to spend your money should not be enticed by the reward programs. This means that you should not stretch your spending in order to garner points.
The use of the card should come as part of your normal spending patterns. You do not have to take a major home remodeling so that you benefit from a credit card reward, however, if you are planning your do your renovation, it is not a bad idea to consider one. You will save money and garner points that you can redeem for cashbacks or holiday vacation.
Large purchases can help you rack up your points fast but one thing you need to remember is that these cards lose their value especially if you begin to experience high interest rate charges. If you are spending large amount from your credit cards, you may need to consider doing that during intro periods so that you have sufficient time to pay off the balance before the issuer starting charging interest.
Some cards will give an introductory period of up to 18 months. This is sufficient time for you to make arrangement to pay the balance, otherwise, you risk suffering from credit card debt, which can ruin your finances. Credit card debits can be difficult to service because the rates sky rocket very fast and with large percentages making it difficult to settle the amount you are owed. You may have credit cards balances attracting interest rates of up to 35 percent if you have balances rolled over.
A new trend has been observed where some spenders have devised ways to use their purchasing power to gain on the perks offered by the cards. In a report by Wall Street Journal, homeowners planning to construct or remodel their homes are putting staggering amount of over $100,000 on their reward cards. The use of these cards should be done correctly otherwise with the large number of cards in the market; it may be confusing to choose the right one.
Before you choose a card, you need to evaluate the reason why you need it. One major aspect you need to consider is your spending habit. You need to check where your money goes to including travel and purchase of food stuffs. If you are business traveler, it is certain that you want to save money in your trip expenses. Using credit card rewards can help you garner points which you can redeem for airline tickets or hotel stay.
Hotel and airline reward cards enable you earn points when you stay in designated hotel facilities or fly on certain airlines. These cards also give you redeemable points in your day-to-day spending, which you can use for hotel rooms or air tickets. For example, Gold Delta Sky Miles credit card issued by America Express offers you a 30,000 bonus miles but this is subject to spending $500 in your first three months of use.
If you are a spender who is trying to make ends meet, perhaps cash back card programs could be a good option. Your spending habits will guide you on which card program to go for. You should consider where you will use the card and how you plan to use it. The need to spend your money should not be enticed by the reward programs. This means that you should not stretch your spending in order to garner points.
The use of the card should come as part of your normal spending patterns. You do not have to take a major home remodeling so that you benefit from a credit card reward, however, if you are planning your do your renovation, it is not a bad idea to consider one. You will save money and garner points that you can redeem for cashbacks or holiday vacation.
Large purchases can help you rack up your points fast but one thing you need to remember is that these cards lose their value especially if you begin to experience high interest rate charges. If you are spending large amount from your credit cards, you may need to consider doing that during intro periods so that you have sufficient time to pay off the balance before the issuer starting charging interest.
Some cards will give an introductory period of up to 18 months. This is sufficient time for you to make arrangement to pay the balance, otherwise, you risk suffering from credit card debt, which can ruin your finances. Credit card debits can be difficult to service because the rates sky rocket very fast and with large percentages making it difficult to settle the amount you are owed. You may have credit cards balances attracting interest rates of up to 35 percent if you have balances rolled over.
How Easy Is It To Trade Profitably In Commodity Futures Market?
Trading in commodity futures market can be quite easy if only you follow the cardinal rules which have been applied by the successful traders. Almost every trader in futures market loses but the secret in profiting in this market is to manage risks. Many traders are not able to manage risks because they do not have trading plans, and do not manage their equity. They also do not leverage their gains and losses. Moreover, they do not get substantial education on how the market works.
If you want to trade easily and profit in this market, you have to follow the rules and be disciplined in your trades. The following tips can help you trade easily and profitably in the long run in futures commodity markets;
- You need to scale down your losses. Every trader in futures market experiences losing positions. There are many losses you will trade in any given trading period. In fact, you may find that the losing trades are more than the profiting trades. The big question is; how to you leverage the losses and gains?
- In order to manage losses and increase your gains, you have to trade with very minimal amount in relation to your equity. The amount with which you trade with will largely be determined by your account equity. You need to leverage the risks of loss to about 2% of your total equity. This means that in the event you trade in losses as it is likely to happen most of the time, you will only incur small losses
- You need to use stop loss orders properly. This is essential because you do not know when the market movement will turn against your position. At one moment you may be trading in profit and the next moment you are trading in loss. When this happens, you may be saved from suffering huge losses in your account by a stop loss order.
- You also need to maximize your profiting trade. Because you will occasionally get a profiting trade, when it happens, you need to optimize it. This does not means that you have to trade with a big percentage of money. You should always ensure that you do not exceed a risk loss of more than 5% of your account equity. When you are trading in profit, you need to hang on and ensure your position keeps on running until you have gained substantial amount. This is the amount which offsets the numerous small trading losses you have incurred.
- You should avoid exiting profiting market prematurely and should let the profits run but on the other hand, you should not overstay a position. If you have gained the targeted amount, you may decide to exit the market even if the position is trading in profit. This is because, the more you hold on, the more you are likely to lose at the end of the trade.
Why Should You Avoid a Margin Call When Trading in Commodity Futures Market?
A margin call occurs when the value of positions in your account exceeds the amount that is available as equity in your account. Mainly traders result to margin calls because of poor trading practices. When trading in futures markets, you are advised to watch the contract size and ensure that you do not over trade your account. There are a number of things, which you can do to avoid being issued with margin calls and they include;
• Trading with very low risk margins
• Not overtrading your account
• Using stop loss orders appropriately
• Avoiding entering a trade unprepared
• Avoiding premature entry and exit of positions
• Trading with the trend and avoiding speculations
It is essential that you leverage the loss that you can bear. You should not risk more than 5% of your account equity. If you can maintain a risk percentage of about 2%, it means that even if the prices of the commodities go against your trade, you will not suffer from margin calls.
It is your responsibility to understand what a margin call means. You need to keep your account fully margined in all your trades. The futures commodity trading is highly profitable to the disciplined and experienced investors. However, for those who lack self management in trading, they are prone to risks of losing their money through extended losses.
When you are trading in this market, there are risks which range from system failures, illiquidity to market volatility. The possibility of changing political and economic conditions also affects the market substantially. There is a lot of enticement when it comes to futures commodity trading. This is because there is a high degree of leveraging available.
You can leverage what you want to gain as well as what you are willing to lose. If you want to gain big profits, you have to risk big losses. Because of the volatile nature of the market, price movements can change unexpectedly and this leads to a disproportional effect on your equity. Whereas the market movement may work in favor of your position, it may also go against your trade.
There is a possibility to sustain a total loss in initial margin funds and this is where you are required to deposit additional funds in order to maintain your position. When your account becomes under-margined, it means that it is insecure at that time and there is no adequate collateral equity in your account to support any further price movements against your position. At this time, a margin call is issued. This means that your order is cancelled and you meet any deficiency or debt balance as a result of the call.
In essence, if you trade with the trend and avoid speculating the market movement, you are able to avoid getting into a situation where your account equity is put at risk. In addition, if you understand the right time to enter and exit the market you are also able to manage unexpected losses.
You should trade with very minimal percentage of your overall equity in order to bear the losses in the event of an untimely change in market movement. You also need to safeguard your position with a stop loss order.
• Trading with very low risk margins
• Not overtrading your account
• Using stop loss orders appropriately
• Avoiding entering a trade unprepared
• Avoiding premature entry and exit of positions
• Trading with the trend and avoiding speculations
It is essential that you leverage the loss that you can bear. You should not risk more than 5% of your account equity. If you can maintain a risk percentage of about 2%, it means that even if the prices of the commodities go against your trade, you will not suffer from margin calls.
It is your responsibility to understand what a margin call means. You need to keep your account fully margined in all your trades. The futures commodity trading is highly profitable to the disciplined and experienced investors. However, for those who lack self management in trading, they are prone to risks of losing their money through extended losses.
When you are trading in this market, there are risks which range from system failures, illiquidity to market volatility. The possibility of changing political and economic conditions also affects the market substantially. There is a lot of enticement when it comes to futures commodity trading. This is because there is a high degree of leveraging available.
You can leverage what you want to gain as well as what you are willing to lose. If you want to gain big profits, you have to risk big losses. Because of the volatile nature of the market, price movements can change unexpectedly and this leads to a disproportional effect on your equity. Whereas the market movement may work in favor of your position, it may also go against your trade.
There is a possibility to sustain a total loss in initial margin funds and this is where you are required to deposit additional funds in order to maintain your position. When your account becomes under-margined, it means that it is insecure at that time and there is no adequate collateral equity in your account to support any further price movements against your position. At this time, a margin call is issued. This means that your order is cancelled and you meet any deficiency or debt balance as a result of the call.
In essence, if you trade with the trend and avoid speculating the market movement, you are able to avoid getting into a situation where your account equity is put at risk. In addition, if you understand the right time to enter and exit the market you are also able to manage unexpected losses.
You should trade with very minimal percentage of your overall equity in order to bear the losses in the event of an untimely change in market movement. You also need to safeguard your position with a stop loss order.
Top Reasons Why Traders Lose Money in commodity Futures Trading
As much as the commodity futures market can earn you good money and in an easy way, on the other hand, you can easily fall into the market’s trading pitfalls. Apparently a big number of those who lose in this market display some common trading characteristics. If you have to be among those who benefit in this trade, you need to avoid the common mistakes, which are made by about 80 to 95% of those who trade in futures market. Some of these mistakes are;
• Lack if an in-depth training on the market
• Over leveraging in commodity trading
• Poor account equity management
• Lack of a concise commodity trading plan
If you plan to trade in commodity futures market, you do not have to be the best trader but it is important that you acquire fundamental knowledge and skills on how this market trade works. What this means is that you have to gain more knowledge other than the typical futures margins, contract sizes, ticker symbols, or entering and exiting an order position.
The good thing is that there are many resource books, which you may read and can help you trade wisely. In this trade, you are competing with some of the most professional traders in the market who have a wealth of experience. You have to remain focused and follow the strategies which have been applied by others that have succeeded in the trade.
Moreover, many traders fall in the trap of poor leveraging strategy. You need to leverage between what you can lose and what you can gain. The most impacting part is the losing trade. When you enter into a contract that risks your entire account, you could easily lose all your money with just a couple of losing positions.
It is therefore important not to risk your account with one trading position. In addition, you should not trade in contracts, which are too large for your account. You need to watch on the contract size you are trading in.
Managing your account becomes a challenge for many people who trade in futures commodity market. This happens because many traders want to gain big money so fast not realizing that a wrong move could leave their accounts wiped out completely. You should not risk more than 5% of your account in just a single trade position. You can leverage your risk to about 2% on one trade.
However, this becomes a challenge especially when you find that you are trading in profit. Since you want to maximize your profits, you end up risking more so that you earn more. What happens is that in the event the market prices shifts somewhere down the line in your trade, you suffer greatly.
However, you can manage this aspect by placing stop loss orders away from your entry so that you are safeguarded from huge losses should the market prices shift against your trade. A plan is essential in order to monitor your trading. However, many traders trade blindfolded without any plan and this means that they are prone to making erratic trading mistakes that cost them dearly. The plan may entail the markets, which you will trade.
The contract size you have to use as a well as your exit and entry strategies may also be featured in the plan. In addition, your plan has to feature the stop loss order strategies that you apply in any given trade. The risk management strategies are also included in this plan. With this tool, you are able to trade carefully and reduce risks, which face most of the traders.
• Lack if an in-depth training on the market
• Over leveraging in commodity trading
• Poor account equity management
• Lack of a concise commodity trading plan
If you plan to trade in commodity futures market, you do not have to be the best trader but it is important that you acquire fundamental knowledge and skills on how this market trade works. What this means is that you have to gain more knowledge other than the typical futures margins, contract sizes, ticker symbols, or entering and exiting an order position.
The good thing is that there are many resource books, which you may read and can help you trade wisely. In this trade, you are competing with some of the most professional traders in the market who have a wealth of experience. You have to remain focused and follow the strategies which have been applied by others that have succeeded in the trade.
Moreover, many traders fall in the trap of poor leveraging strategy. You need to leverage between what you can lose and what you can gain. The most impacting part is the losing trade. When you enter into a contract that risks your entire account, you could easily lose all your money with just a couple of losing positions.
It is therefore important not to risk your account with one trading position. In addition, you should not trade in contracts, which are too large for your account. You need to watch on the contract size you are trading in.
Managing your account becomes a challenge for many people who trade in futures commodity market. This happens because many traders want to gain big money so fast not realizing that a wrong move could leave their accounts wiped out completely. You should not risk more than 5% of your account in just a single trade position. You can leverage your risk to about 2% on one trade.
However, this becomes a challenge especially when you find that you are trading in profit. Since you want to maximize your profits, you end up risking more so that you earn more. What happens is that in the event the market prices shifts somewhere down the line in your trade, you suffer greatly.
However, you can manage this aspect by placing stop loss orders away from your entry so that you are safeguarded from huge losses should the market prices shift against your trade. A plan is essential in order to monitor your trading. However, many traders trade blindfolded without any plan and this means that they are prone to making erratic trading mistakes that cost them dearly. The plan may entail the markets, which you will trade.
The contract size you have to use as a well as your exit and entry strategies may also be featured in the plan. In addition, your plan has to feature the stop loss order strategies that you apply in any given trade. The risk management strategies are also included in this plan. With this tool, you are able to trade carefully and reduce risks, which face most of the traders.
Understanding the Futures Contracts
Futures market is a marketplace where buyers and sellers engage in commodity selling contracts. Although the futures contracts state the price and when it is paid as well as the date of delivery of the products, almost all futures contracts end without the actual delivery of commodities. The futures contract is an agreement between two parties.
One party takes a short position and this is the party who agrees to deliver a commodity and a long position is taken by the other party who agrees to receive a commodity. The price of futures is represented by an agreed-upon price of the commodity in question. A financial instrument may also be used to determine the price of the commodity.
The profits and losses of futures contracts largely depend on the daily price movements that are witnessed in the market. The profits and losses are calculated on daily basis. Unlike the stock markets, the futures positions are adjusted or settled on a daily basis and this means that profits and losses are deducted or credited on the traders’ accounts on a daily basis based on the movement of the price as agreed upon in the contract.
Since the accounts of the parties engaged in a futures contract are adjusted every day, this means that most transactions in this market are settled in cash. What happens is that the actual physical commodity is bought and sold in the cash market but not in the futures market. Depending on how the prices change every day, when the two positions decide to close their contract, one will have lost and the other gained but this depends on how the prices have changed over that period.
In the real sense, none of the parties actually go to the market to buy or sell these commodities and this means they only act as speculators of the price movements. This is how the futures contracts are derived. The futures contract is more like a financial position and the position takers are actually speculators.
The short speculator is the one who agrees to deliver the commodity and the long speculator is the one who agrees to receive the commodity. But because neither of these parties will go to the market to buy or sell the commodity even after the contract expires, it means that all the deals are settled in cash.
Futures markets are important economic tools since they help determine the supply and demand of commodities today and in the future. The continuous flow of information from around the world affects the prices. Factors like war, weather changes, debt defaults, government regulations on major currencies as well as crop reports all affect the market prices.
It is this kind of information and the way people tabulate and absorb it, which constantly keeps on influencing the price of the commodities in the futures market. This is a process known as price discovery. Because the price of commodities is pre-set, this reduces the risks. The traders know how much they will need to buy and sell.
One party takes a short position and this is the party who agrees to deliver a commodity and a long position is taken by the other party who agrees to receive a commodity. The price of futures is represented by an agreed-upon price of the commodity in question. A financial instrument may also be used to determine the price of the commodity.
The profits and losses of futures contracts largely depend on the daily price movements that are witnessed in the market. The profits and losses are calculated on daily basis. Unlike the stock markets, the futures positions are adjusted or settled on a daily basis and this means that profits and losses are deducted or credited on the traders’ accounts on a daily basis based on the movement of the price as agreed upon in the contract.
Since the accounts of the parties engaged in a futures contract are adjusted every day, this means that most transactions in this market are settled in cash. What happens is that the actual physical commodity is bought and sold in the cash market but not in the futures market. Depending on how the prices change every day, when the two positions decide to close their contract, one will have lost and the other gained but this depends on how the prices have changed over that period.
In the real sense, none of the parties actually go to the market to buy or sell these commodities and this means they only act as speculators of the price movements. This is how the futures contracts are derived. The futures contract is more like a financial position and the position takers are actually speculators.
The short speculator is the one who agrees to deliver the commodity and the long speculator is the one who agrees to receive the commodity. But because neither of these parties will go to the market to buy or sell the commodity even after the contract expires, it means that all the deals are settled in cash.
Futures markets are important economic tools since they help determine the supply and demand of commodities today and in the future. The continuous flow of information from around the world affects the prices. Factors like war, weather changes, debt defaults, government regulations on major currencies as well as crop reports all affect the market prices.
It is this kind of information and the way people tabulate and absorb it, which constantly keeps on influencing the price of the commodities in the futures market. This is a process known as price discovery. Because the price of commodities is pre-set, this reduces the risks. The traders know how much they will need to buy and sell.
Tips on How to Take Positions in Commodity Futures Trading
When you are trading in commodity futures market, you are out there to make profits. However, the trading market is characterized by randomness meaning that at one time the market is trading with profits and the next moment it is trading with losses. If you have set a predetermined price when you will exit, then you are in a better position to trade profitably.
Taking a position involves a number of things and the most important is to trade with the trend. Because of the volatility of the market, prices can shift unexpectedly and if you are wrong, in your position, you incur losses. Leveraging the potentials for losses and gains is the best approach in realizing profits in the long run.
In most cases, you will face numerous trading positions with losses. When you find that you are trading with loss, the best thing to do is not let the loss run. You have to close that order position. Through the stop loss orders, you are able to control the losses you suffer when trading.
It is typical to suffer losses as you trade in commodity futures and forex market but the adverse effects of these losses on your equity can be managed by stop orders. You have to set the position in such a way that you exit when there is a trading loss. This will ensure that you keep the losses minimum.
On the other hand, when you trade with profits, you should allow the position to run. This will ensure that you optimize on that order. It is only by optimizing the profiting trading positions that you can cover up the losses you have suffered in the subsequent small losing trades. Since losses cannot be avoided in futures commodity market, you only have to control them.
Before you take any position, it is important that you examine how the trend in market prices has been going on in the past. You may consider a 4 weeks period and follow that trend. When you realize that today the closing price is higher than what the closing price was 25 market days ago, then you can buy that order position.
When you move with the trend, you are likely to trade the big profit markets. If you spend much time speculating and anticipating that things will favor you and you do not have a strategy, then you are likely to suffer more losses than gains. In addition, when you discover that you are trading with profit, you also have to exit when you have attained your predetermined price.
Holding for long or overstaying a position can plunge you into a huge loss if the market shifts sharply against your price. Overstaying arises because you want to keep holding on the position as the market is still trading with profit.
Although it advisable that you keep profiting position rolling, then again, you have to be careful. You should not overstay. You should have a pre-calculated move and exit when it is the right time to do so. Always ensure that you optimize profits and reduce losses significantly in a forex trade or futures market trade so that the overall long term trading becomes profitable.
Taking a position involves a number of things and the most important is to trade with the trend. Because of the volatility of the market, prices can shift unexpectedly and if you are wrong, in your position, you incur losses. Leveraging the potentials for losses and gains is the best approach in realizing profits in the long run.
In most cases, you will face numerous trading positions with losses. When you find that you are trading with loss, the best thing to do is not let the loss run. You have to close that order position. Through the stop loss orders, you are able to control the losses you suffer when trading.
It is typical to suffer losses as you trade in commodity futures and forex market but the adverse effects of these losses on your equity can be managed by stop orders. You have to set the position in such a way that you exit when there is a trading loss. This will ensure that you keep the losses minimum.
On the other hand, when you trade with profits, you should allow the position to run. This will ensure that you optimize on that order. It is only by optimizing the profiting trading positions that you can cover up the losses you have suffered in the subsequent small losing trades. Since losses cannot be avoided in futures commodity market, you only have to control them.
Before you take any position, it is important that you examine how the trend in market prices has been going on in the past. You may consider a 4 weeks period and follow that trend. When you realize that today the closing price is higher than what the closing price was 25 market days ago, then you can buy that order position.
When you move with the trend, you are likely to trade the big profit markets. If you spend much time speculating and anticipating that things will favor you and you do not have a strategy, then you are likely to suffer more losses than gains. In addition, when you discover that you are trading with profit, you also have to exit when you have attained your predetermined price.
Holding for long or overstaying a position can plunge you into a huge loss if the market shifts sharply against your price. Overstaying arises because you want to keep holding on the position as the market is still trading with profit.
Although it advisable that you keep profiting position rolling, then again, you have to be careful. You should not overstay. You should have a pre-calculated move and exit when it is the right time to do so. Always ensure that you optimize profits and reduce losses significantly in a forex trade or futures market trade so that the overall long term trading becomes profitable.
5 Mistakes You Should Avoid When Trading in Commodity Futures Markets
The ability to trade profitably in commodity futures markets is impaired by a number of things and it is important that traders keenly observe the tips and advices, which are provided by those who have successfully traded in this market. Often, people think that they can be smart and spend most of their times studying the market yet the most successful traders spend little time in researching the commodity futures market.
Although it is recommended that you remain updated of the trends, news and what is happening in the market, on the other hand, there are simple things you can avoid, which will enable you trade profitably and get a good share of the market.
Below are five things you must avoid to trade successfully in futures markets;
With a good plan and risk management, you are able to earn big from this market in the long run. You should avoid margin calls at all costs because these are signs that you are not trading well. Margin calls means that your capital is in danger and could be consumed leaving you with no money to trade in the big profits. Margin calls can be avoided by following the cardinal rules of profitable commodity futures market trading.
Although it is recommended that you remain updated of the trends, news and what is happening in the market, on the other hand, there are simple things you can avoid, which will enable you trade profitably and get a good share of the market.
Below are five things you must avoid to trade successfully in futures markets;
- Avoid trading without a plan. The cornerstone in profiting is devising a plan that will help you know when it is the right time to enter a position and when to close a position. You should also leverage what risks you have to take. You should know where and when you are going to exit the market if you are wrong. In addition, you should have a safety stop or stop order in case the market sharply shifts against your trade in order to avert huge losses.
- Moreover, you must avoid trading without a money management strategy. Managing your money in commodity futures trading means managing risks. In this trade, you will experience a cycle of losses and profits. The losses may be more than the profits and therefore you must know when to make stops. If you are trading with a loss, you should exit. If you hold on to a losing position, you will incur more losses if you are wrong. By managing money, it implies controlling your risks by executing stop orders. It also implies balancing your potential losses against your potential gains. The amount you risk in each and every trade should be minimal in order to avoid your account being wiped out by large losses.
- Avoid letting losses run. Many traders do not want to lose and they never accept losses. This compels them to hold on to losing trades when they could actually exit through a stop loss order. When you realize that you are trading with a loss, you should stop and wait for the market to turn. You have to accept the loss. A successful trader is one who is able to leverage losses by only allowing small losses. If you leverage your losses and ensure that they are small and keep your profit positions running, then you will gain. In addition, with a predetermined exit price for your trade, you are able to get big profits and only realize small losses. This is the characteristic trading pattern of the successful traders. Since losing is part of the trade, the only way to remain on the safe side is to minimize the losses and maximize profits.
- Another thing you should avert is stopping prematurely when the market is trading with profit. Due to fear or lack of confidence, you may exit a position, which is trading with profits because you think that the market may change suddenly and lose that large amount you have earned. It is important to monitor the trade and continue running until that time it starts to change its movement. This is where you should close a position, which is trading with profit. If you close a position prematurely and the market continues to rise, you are tempted to enter again. By the time you enter, it has already earned other traders big profits. When it starts to move against your market, then you get losses.
- Avoid overstaying a position. If the market trades in your favor and meets your price target and you find that you do not have a close stop loss order, then you may be overstaying your position. You must take profits at a predetermined level. Although you are recommended to let your profits run, on the other hand, overstaying a position could cause more harm than gain. If the market breaks sharply and moves against your price, then this could deal you a blow. You will watch all that big profit you had made drain away within a short period.
With a good plan and risk management, you are able to earn big from this market in the long run. You should avoid margin calls at all costs because these are signs that you are not trading well. Margin calls means that your capital is in danger and could be consumed leaving you with no money to trade in the big profits. Margin calls can be avoided by following the cardinal rules of profitable commodity futures market trading.
Great Strategies that Can Help you Trade Profitably in Commodity Futures Markets
As much as you can earn pretty good money by trading in commodity futures markets, there also lies a big risk of losing in your trade. The most successful traders leverage what they can earn and what they can lose. This means that they are prepared to lose. The following strategies can help you trade profitably in commodity futures;
In essence, these are some of the cardinal rules of commodity futures trading that can help you trade profitably while minimizing big losses and maximizing profits. The truth about the futures contract markets is that you will be faced with numerous losses and have to cut them short, otherwise, they will wipe out your entire capital long before you enjoy the big profits.
- Trading with the trend is certainly one of the important tactics you can use to profit in commodity futures. Apparently, many traders find it difficult to trend with the trend. It is hard to exit a position because the give-up point appears to be further away. What happens is that you want to remain in that position hoping that you will earn more before you exit. However, this potentially causes a larger loss if the market shifts against your trade position.
- You can follow an entry rule by buying if today’s closing price is higher than the closing price of 25 market days ago. This way, you are trading with the trend.
- It is important to cut losses short but surprisingly, traders never want to exit a market when they are trading with a loss. They want to cling on their position hoping that the market price will shift in their favor. There are many reasons that compel traders to hold to a position when trading with a loss and the immediate one is that they think that the market will suddenly turn around and give them a profit instead of a loss. This anticipation is what traps many traders in losing large amounts of money in a single trade.
- The best trading practice is to keep the losses short while you trend in the direction of the trade. Even when you experience successive large number of losses, you should remember that as long as you are trending with the trend, the big profits will come their way. You have to ensure that the losses are cut short before they take up your capital and fail to profit when the time comes for a favorable commodity futures trade.
- Another way you can optimize your profits is to let profits run. It is important that when you are trading in a profitable position, you keep the profits running as long as possible. This is because the trade is likely to continue trading in profits for longer. This way you maximize your profits.
In essence, these are some of the cardinal rules of commodity futures trading that can help you trade profitably while minimizing big losses and maximizing profits. The truth about the futures contract markets is that you will be faced with numerous losses and have to cut them short, otherwise, they will wipe out your entire capital long before you enjoy the big profits.
How to Reduce the Risks of Trading in Commodity Futures Market
The most important aspect about commodity futures trading just like the financial market trading is that you must manage risks. Managing risk entails basically keeping the losses at minimal and this means that in the event the market goes against you, you are not put into financial problems. The following tips can help reduce the risks of trading in commodity futures;
- A single shift of prices could mean a big fluctuation that may affect the capital you have invested to trade in commodity futures market. It is advisable that you do not trade with fear even in times of losses because this is part of the trade. What you can do is reduce the amount you may lose in any one given trading position.
- Avoiding large single or individual losses is one thing that traders need to ensure so they minimize the chances of plunging into financial pitfalls when trading. A long term success in futures trading is determined by the ability to realize risks and face them. Besides leveraging the amount that you put at risk, there is also another element of managing risks in this trade.
- The market you trade in particularly important. When you trade, you will discover that some markets are more volatile and risky than others. Therefore, if you have small amount to trade with, then you should refrain from trading big money. You have to keep risks in proportion to your capital. This means that you have to emphasize on risks over the big profits you can make in a given market.
- Commodity futures markets are faced with surprise turn of events, which affect the market too fast and move prices against your trade and the movement can be too quickly to exit a position. Within seconds, the prices could drift against your trade and wreck havoc on your trading position causing immense losses.
You have to examine the risk of surprise events like crop reports, floods, freezes, wars and currency interventions as these can catch you unawareness meaning that by the time you exit a position, the market has very quickly turned against your trade and big losses have been realized. You may trade very well in the better part of a trading period only to lose all that money you have profited for that long period within a blink of an eye.
- The bigger the profits you pursue in your trading positions, the bigger the risks you have to take. The good thing with commodity futures trading is that you are able to make big money in a very short time. But again, you can even lose much more in a very short time.
Bad Credit Score Not Preventing Consumers from Short Term Loan Approval
Your credit score can dictate the way in which you access loan facilities as well as the kind of terms you are offered for the loans. However, for one consumer, it seems that accessing short term loans is quite easy. When you are in bad credit, banks and other lenders shy away from offering you credit facilities. You are abandoned at a time when you actually need a credit facility. Payday loans are changing the way bad credit consumers have been previously perceived.
There has been misconception that bad credit consumer cannot repay a loan substantially but this is being proven wrong. Actually that consumer can pay very high interest-rate loans like the cash advance or next payday loans offered by lenders. These loans attract an interest rate of about 400percent but this can stretch to as high as 750 percent or even higher. For example, one company Wonga, a payday leader is said to offer short term loans attracting interest rates as high 4000 percent.
Wonga, a UK leading payday loan lender states that it will always tell you the full cost of cash advance loan repayment upfronts and there are not catches or extra costs. Yes! Wonga goes on to state that their services have a representative APR of 4214 % but this is an annualized measured, which takes into consideration a compounding theory.
The loans are intended to be repaid for between one day and one month and the short the period the higher the APRs. In the US, the payday loans APRs are relatively lower ranging about 750% on the higher side though some lenders may clock the 1000% APR mark. When the credit crisis hit many parts of the world from 2007, many consumers had borrowed heavily with multiple loans or large sized credit facilities.
They did not anticipate that things would take a different twist of events. The financial institutions abandoned many consumers with bad credit but today, this scenario is changing as the lending companies make a comeback. The effects of delinquencies, bankruptcy, and foreclosures reflect on credit report for a long time.
Although some of the consumers may have stabilized financially, the effects of the credit crisis still reflect in their credit reports. Payday loan lenders are now offering high interest rate loans, which are secured by a paycheck. The loans are easy to obtain and you can apply online. Because of the frustrations consumers have had whenever they visited banks to apply for loans, they have found good friends in lending which are the payday loan lenders.
These lenders seem to understand the needs of the underserved borrower and this is why they are preferred by many consumers. Not only are payday lenders offering short term loans to the consumers but banks have also joined the market. Different banks are offer payday loans under different names for example, Wells Fargo offers Direct deposit advance, Guaranty Bank offers Easy advance while Bank of Oklahoma offers Fast loan. The bank payday loans attract an interest of about 250 to 300 percent APR.
There has been misconception that bad credit consumer cannot repay a loan substantially but this is being proven wrong. Actually that consumer can pay very high interest-rate loans like the cash advance or next payday loans offered by lenders. These loans attract an interest rate of about 400percent but this can stretch to as high as 750 percent or even higher. For example, one company Wonga, a payday leader is said to offer short term loans attracting interest rates as high 4000 percent.
Wonga, a UK leading payday loan lender states that it will always tell you the full cost of cash advance loan repayment upfronts and there are not catches or extra costs. Yes! Wonga goes on to state that their services have a representative APR of 4214 % but this is an annualized measured, which takes into consideration a compounding theory.
The loans are intended to be repaid for between one day and one month and the short the period the higher the APRs. In the US, the payday loans APRs are relatively lower ranging about 750% on the higher side though some lenders may clock the 1000% APR mark. When the credit crisis hit many parts of the world from 2007, many consumers had borrowed heavily with multiple loans or large sized credit facilities.
They did not anticipate that things would take a different twist of events. The financial institutions abandoned many consumers with bad credit but today, this scenario is changing as the lending companies make a comeback. The effects of delinquencies, bankruptcy, and foreclosures reflect on credit report for a long time.
Although some of the consumers may have stabilized financially, the effects of the credit crisis still reflect in their credit reports. Payday loan lenders are now offering high interest rate loans, which are secured by a paycheck. The loans are easy to obtain and you can apply online. Because of the frustrations consumers have had whenever they visited banks to apply for loans, they have found good friends in lending which are the payday loan lenders.
These lenders seem to understand the needs of the underserved borrower and this is why they are preferred by many consumers. Not only are payday lenders offering short term loans to the consumers but banks have also joined the market. Different banks are offer payday loans under different names for example, Wells Fargo offers Direct deposit advance, Guaranty Bank offers Easy advance while Bank of Oklahoma offers Fast loan. The bank payday loans attract an interest of about 250 to 300 percent APR.
Friday, November 15, 2013
Payday Loans: Are the Easy Fast Cash Payday Loans a Better Option?
Until you face a situation where you do not have cash in your account and no one to lend you money, you may not know the importance of payday loans. Financial stability is an aspect that many people strive to achieve but it doesn’t always happen to many people. Even with a substantial income stream and good personal financial planning strategies, at times you run short of cash and you are placed in an urgent need for money to settle a financial emergency need. This is the high time you realize the benefits of payday loans.
These types of loans are specially designed for the most pressing financial needs and its imperative to point out they may not be the right loan facilities for everyone.
There are immediate benefits that are attached to these types of short term loans and these include;
• Easy application process.
• Disbursed within a short time.
• You do not need to provide your credit worthiness.
• Can apply online.
When you are faced with a cash emergency such as medical bills, you need money in the least time possible so that you can resolve the financial need. With the conventional financial institutions, the process of loan application may not be easy and it may take you a while. This is where payday loans come in handy.
These cash advance loan facilities can help you when you need cash fast and have no alternative to get the money. The loans can be applied and released pretty within hours or a day. The process is simple and does not require you present a lot of information about your credit worthiness.
With the challenges people are facing from bad credit report, the payday loans have provided a relief for those people seeking for financial assistance when they need them most. Banks and other financial institutions are shying away from lending people with bad credit and this means that people cannot access loan facilities from these institutions.
Even in cases where people have stabilized in their finances, bad credit reports continue to affect them for years thus being locked out from accessing loan facilities from the traditional banking institutions. This is the reason why payday loans have been praised of offering tailored services that are most beneficial to people who are still suffering from effects of bad credit.
In addition, these payday loans can easily be applied online and may not require you to fax information or wait in queue in a payday loans store. It is also important that people anticipating to borrow these fast cash, they understand that there are pros and cons of the loans.
Although these loans are very convenient to obtain, they can also be quite technical in their payment. They mature pretty fast and require that you have a promising employment in order to be able to pay them. One of the limitations is that these loans have a relatively very high annual percentage rate APR. This means that they may not be appropriate for long term loan facilities.
If you have to take these loans, you need to ensure that you observe strict repayment plan to avoid any delinquencies. If these loans are borrowed appropriately, these can indeed help repair your credit report. When you are borrowing payday loans, you need to understand the benefits and limitations so that you do not mess up on the repayment, which can worsen your credit report.
These types of loans are specially designed for the most pressing financial needs and its imperative to point out they may not be the right loan facilities for everyone.
There are immediate benefits that are attached to these types of short term loans and these include;
• Easy application process.
• Disbursed within a short time.
• You do not need to provide your credit worthiness.
• Can apply online.
When you are faced with a cash emergency such as medical bills, you need money in the least time possible so that you can resolve the financial need. With the conventional financial institutions, the process of loan application may not be easy and it may take you a while. This is where payday loans come in handy.
These cash advance loan facilities can help you when you need cash fast and have no alternative to get the money. The loans can be applied and released pretty within hours or a day. The process is simple and does not require you present a lot of information about your credit worthiness.
With the challenges people are facing from bad credit report, the payday loans have provided a relief for those people seeking for financial assistance when they need them most. Banks and other financial institutions are shying away from lending people with bad credit and this means that people cannot access loan facilities from these institutions.
Even in cases where people have stabilized in their finances, bad credit reports continue to affect them for years thus being locked out from accessing loan facilities from the traditional banking institutions. This is the reason why payday loans have been praised of offering tailored services that are most beneficial to people who are still suffering from effects of bad credit.
In addition, these payday loans can easily be applied online and may not require you to fax information or wait in queue in a payday loans store. It is also important that people anticipating to borrow these fast cash, they understand that there are pros and cons of the loans.
Although these loans are very convenient to obtain, they can also be quite technical in their payment. They mature pretty fast and require that you have a promising employment in order to be able to pay them. One of the limitations is that these loans have a relatively very high annual percentage rate APR. This means that they may not be appropriate for long term loan facilities.
If you have to take these loans, you need to ensure that you observe strict repayment plan to avoid any delinquencies. If these loans are borrowed appropriately, these can indeed help repair your credit report. When you are borrowing payday loans, you need to understand the benefits and limitations so that you do not mess up on the repayment, which can worsen your credit report.
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