Audrey Archive
August 29, 2008 - Credit management 101 for college students
This time of year, your son or daughter may be making some decisions about the future. Using credit safely and responsibly is an important milestone on the journey to self-sufficiency. With a few credit basics, parents can help start young cardholders on the right path. But beginning credit customers may need some guidance; particularly with the point that credit is best used as an emergency resource at this point in life, not a way of life (a spring break ski trip isn’t an “emergency”). It’s easy, when spending “plastic,” to lose sight of the fact that this is actual money. Young credit card holders need to understand the concept of finance charges. Other charges to make college kids aware of are fees for cash advances, annual fees, and late payment fees. As with any cardholder, a comparison between cards based on rates, fees and possible rewards is essential before opening any accounts.
One option for college students may be a secured card. With a secured card, the cardholder puts money in the bank as security against the card, to guarantee that the card issuer will be paid if the cardholder doesn’t pay the bills. That can be a good way to build a credit history with less risk.
Children always learn by example, so if your credit use is healthy you’ve given your college kids a great model to emulate. Remember though, that sometimes a lesson doesn’t sink in until you’ve made a mistake. So if your college kid does make some minor credit slip-ups in the beginning (note emphasis on minor), it’s better now, especially while you’re still in the picture and the amounts are small. Read more in this Learning Center about our recent survey on college kids and credit.
July 29, 2008 - Data on home prices
As reported in the New York Times today, "home prices, already falling at the steepest rate in two decades, tumbled again in May, according to the Case-Shiller index, a widely watched survey that measures prices in 20 major metropolitan areas. Prices were down 15.8 percent from May 2007, including a 0.9 percent one-month drop in May alone. " Read more
July 22, 2008: How can you gauge what this means for your property?
We all know that with the credit crunch, home prices have been declining, and they’re not showing any signs of slowing down. This could be good news for you if you’ve got your eye on a property, but is it bad news if you’re selling? Not necessarily—it depends where you live. (With real estate, as well as most other financial matters, panicking never helps!) The good news is, no matter where you live, you can find out the price of comparable properties using TrueCredit's Property Value Report.
If you’re selling, your best weapon in the fluctuating home market is to stay informed. Start with a good look at the Property Value Report so you know where you stand. Then look at ways to increase your home’s value and marketability, whether it’s renovation, painting or just a good cleaning.
If you’re buying, that’s an excellent reason to keep an eye on your credit. Find out more about how credit monitoring can help you make a more effective case to lenders and secure better rates while prices are lower.
July 8, 2008 Entry: Fed Rate Cuts
The Fed cutting rates and its impact on credit
Wondering what the Federal Reserve cutting interest rates has to do with your credit score? You’ve probably read a lot in the news lately about the Fed’s rate cuts, but might be confused about what it all means.
What’s known as the fed rate is the interest rate banks charge each other to borrow money overnight. The prime rate is the interest rate banks charge their best customers, usually a few points higher than the fed rate. The fed rate affects savings, mortgage or consumer loans. The immediate impact we’ve seen is falling adjustable-rate mortgage rates. Mortgages that are going to reset will do so at lower rates. If you have a fixed rate mortgage, the Fed’s rate cut won’t affect it. The interest rates on new fixed rate mortgages are impacted by inflation and long-term bond yields, which are determined by general economic conditions. However, if you have an adjustable rate mortgage, it’s a good time to refinance to a fixed rate, if your credit is good and your home’s value has remained steady.
If the prime rate falls, most variable-rate credit cards are determined by the prime rate and their interest rates should drop accordingly. The best way for you to know if the rate cuts are being passed on to your credit cards is to monitor these accounts. Don't take anything for granted. Again, we see why it's so important to have a good credit rating. Borrowers without them won't benefit from the lower rates. You can check your credit reports now.
