What do I need credit for anyway?

This is a question easiest answered by saying in my opinion. THE WORLD REVOLVES AROUND CREDIT. How you evolve in this world is your choice. AND

Credit is an identity in this world. Without some sort of referrence we do not exist.

Credit allows for individuals to improve our standard of living while paying just a bit at a time over a long period of time. OK it comes down to needs vs wants. We all need certain comforts known as Creature Comforts. Food, Shelter and Clothing.

We want usually the best of those comforts and credit is the way to get what we want.

Many times a mature individual (senior) will apply for a car loan rather than break up a long time investment and be refused because they have no credit referrence because of paying cash for 50 years. They do not have any debts and therefore do not have any identity.

Note that this is a dwindling population but it is hoped that the the pragmatic and prudent use of money and credit does not die with them. So go out and get a credit card and the identity it creates, but how you use it is up to you.

Secured Credit cards and the credit rating

The secured credit card term means that by placing some of your money as a security deposit or collateral a credit card company will issue you with an equivelent amount as credit limit on their card. An example of this is if you place $500.00 up as a deposit the credit card company will give you usually $500.00 as a credit limit.

This establishes a credit reference on the bureaus and allows you to purchase goods with you card and pay as per the card holder agreement. Once an individual has demonstrated a responsible use of the card then they can apply to have the security amount reduced or returned while maintaining the credit limit.

Make sure that if you obtain a secured credit card that the company will pay you interest on your deposit and that it is not just a fee.

Share Loans

Share Loans, one of the best ways to get your credit back on the positive side AND still be able to take advantage of current offers and purchases.

Share Loans basically take your money and match it with an equivelent amount lent to you by your institution. For instance. If you need $2000.00 for a used car. By having $1000.00 of your money left in a saving account and not touch it, the lending institution will offer you $1000.00 against your savings amount. As you make payments against the $1000.00 you can use the equivelent amount out of your savings.

Its a one to one match and it is a great way to show credit worthiness and responsibility. It is a great way to re establish or just establish credit for a youth just starting out.

The idea was first established by the Credit Union and Co-operative lending institutions.

Utilities and debt

What is one of the most important monthly expenses or services you use? Electricity, Natural Gas or Propane, Water,?

Answer. All of them together. Pretty much a tough go of it if you loose your electricity in winter because of lack of payment. Heat likely the same. Well there are laws in many states stipulating that the basic utility services can not be terminated or "turned off' during the winter months. (November to March) in most states.

No way do I suggest you play the system because you will ultimately still be responsible for the bill, but if threats come from the collection agencies be sure to talk to a credit counsellor and have them research the applicable act.

Credit Card Awards

You will often see Credit Cards entice you to sign up to accumulate points for Automobiles, Travel or what ever. In the event that you have to do a chapter 7 or 13 you stand the very real chance of loosing all of those points and benefits.

Wage Garnashees

Wage Garnashees are nasty things. They are court ordered and are designed to force you to repay a debt to a debtor. If you say owe money to a Credit Card company. You have neglected to repay even your minumum payment, refused to answer their calls, decided to have the phone disconnected maybe.... They will leave me alone now?

Nope. A Garnashee order is issued and you will appear in Court. Without a suitable reason for your conduct a judge may issue an order to Garnashee your wages and there is not too much you can do except beg for forgiveness. Not too likely it will work. In other countries such as Canada Garnashees can be ordered with out you even knowing until you notice a difference in your net pay and payroll is not to blame.

Best practice. Call a creditor, keep the lines of communication open and do your best to make payment.

How can a company sell you stuff and not have you pay til 2009?

That baffled me for a while till I found out about factoring and the sale of receivables. Companies that provide you the big screen tv actually sell the account that you formed and the agreements that support that account to a finance company. That finance company essentially lays in wait for you to come to the end of your "no payment holiday" and then hopes you will not be able to pay out on time. They then start the interest and principle calculations from the day of purchase and you pay it all right then and there. If you cannot you start paying the debt off over a period of time at a substancial interest rate.

The company that sold you the item gets paid within days of selling you the goods.