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Having good credit is almost a necessity on today's world. In most cases, credit it essential to owning a car or home, and with the proliferation of online shopping it's hard to be without a credit card. Unfortunately, some people get into trouble with their credit. They miss some minimum payments on their credit card, or let a loan go into default. When this happens the creditor will report it a credit reporting agency, who will add it to your credit history. Once your credit history is blemished, it can be difficult to repair: most things will stay on your credit history for 7 years before they are removed.
Once you're in a situation where you have a bad credit history, you'll find yourself dealing with many previously unknown problems: you won't be able to rent cars or purchase things online; landlords will hesitate to rent property to you; a mortgage may be difficult or impossible to get. This is why it's important to engage in credit repair as soon as possible: you can do wonders for your credit repair by taking proactive an early action.
One of the best things you can do if you've fallen behind on payments is to contact your creditor. Many people, alas, take the opposite approach: they feel a sense of embarrassment or shame and avoid calls and contact with their creditors. This type of behavior is shortsighted and will result in long term credit difficulty.
The best thing you can do in terms of credit repair is to contact your creditor as soon as you run into trouble with a debt. Remember that the key to credit repair lies in your credit history report, and the report depends on whether or not your creditor reports you to the credit reporting agency. In most cases your creditor will be open to discussing alternate payment plans and solutions. Keep in mind that it is not in the creditor's interest to push you away, as that could mean they get no payment at all. Instead, the creditor is likely to be open to discussing terms.
For these reasons you should always contact your creditor to ensure faster credit repair. Once you contact them, propose a payment system that is realistic both for you and the creditor. It is absolutely essential that you propose a payment plan you can stick to, and that you stick to it. The absolute worst thing you can do is default on these payments - if you do so it will seem like you were simply stalling to avoid payment from the creditor's points of view.
In general, when contacting your creditors in regards to outstanding debts, remember that their decision as to whether to report your non-payment to the credit report agency will affect you greatly, and it is in your interest to do everything in your power to convince the creditor not to do this. By contacting your creditor early and proposing a realistic payment system, you take one of the most effective steps possible towards credit repair.
The United States economy is dependant on consumers spending money. These days, the economy needs all the help it can get. A local economy benefits when shoppers buy goods and services in retail stores, rather than online. Better still, patronizing a locally owned business, rather than a national chain store or restaurant, will keep even more money flowing in the local area.
We have all heard that you should help your local area by shopping in locally owned stores. This is true. Many cities have even setup websites to list and promote locally owned businesses. A chain store certainly provides jobs and pays taxes. But when you purchase goods at a chain store, much of that money is sent to its corporate headquarters, which is probably not in some far away city.
To maximize the positive effect that your purchase will have on the economy, those purchases should be paid for with cash, checks, or even debt cards. Not a credit card.
Simply put, using a credit card strips money out of the pocket of the retailer or service provider. Somewhere between 2% to 6% of your credit card purchase is kept by the banks and the credit card companies. That's money taken out of circulation (i.e. the economy) and stuffed into the pockets of the bank.
For example, suppose there is a local store or restaurant that does $1 million in annual sales. Not $1M in profit, but $1M in annual sales. That's an average of about $2800 of sales per day, which is easily obtainable by many successful businesses. After subtracting normal business expenses (employee salaries, taxes, insurance, utilities, rent, advertising, inventory, etc) the final profit may be $100,000. Pretty good profit actually.
Now if the sales of that store were made using credit cards, then about 3% of those sales are taken away and sent to the bank. Remember, its 3% of the sales, not 3% of the final profit. In our example, that's $30,000 removed from the pocket of the retailer, and out of the local economy. Looking at it this way, the business' profits are now reduced by 30%.
What's an extra $30,000? It's the ability to hire another employee. Or two part-time employees. Not from extra sales, just the same sales paid by cash. This example is just one store. Think of this scenario in all the stores in your area, and the numbers are staggering.
In addition, your personal economy is enhanced by keeping your credit cards at home. Without using credit cards, you will not be paying extra interest or other fees. Interest paid is just more money out of your pocket, sent to the bank. For nothing! Just wasted money.
Think about this the next time you pull out your credit card. Help your local retailer and economy by putting that credit card back. Pay with cash or check. If you like the convenience of a credit card, consider using a debt/check card. Be sure to tell the clerk to run the transaction as a debit card. Processing the debit card as credit will cost the retailer their 2% - 6%. If the retailer cannot process your transaction as a debit card, then return to the old standby. Pay with cash.
The retailer pays a small transaction fee when accepting payment via a debit card. It's a flat fee, and usually very minimal. Nowhere near 2% - 6% of your purchase. This is why some stores will offer cash back when using a debit card. It does not cost the store any extra money, and it may save you a trip to the ATM, and perhaps an extra ATM fee. Which is more money sucked out of your wallet. Wasted.