How Many Secured Cards Should You Have?

I have struggled with credit for most of my life before finally turning things around and I have never owned more than one secured credit card at a time. My reasoning was that when my credit does finally turn around, I didn't want to be stuck with a bunch fo secured credit cards.

Nowadays, most secured cards convert to unsecured within a 12–18 months and they probably did back then too but I just didn't want to deal with the hassle of trying to keep up with them and what I owed or how many months I had left before it did or did not convert.

It’s not the number of credit cards you own as much as how you use the ones you currently have. Today I own about 22 unsecured cards which include 8 major credit cards and my scores average about 700 over the three major credit bureaus. Not great, but just good enough to get what I want and need.

In contrast, I have friends who own 4–5 cards whose credit scores consistently stay above 700 year-round. Admittedly, neither of them has the Maverick mentality that I do and they are 10X more conservative than I am, so personality plays a huge roll in it too.

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Credit cards for people with bad credit

There are numerous credit cards available for people with bad credit. The problem is that most people aren't able to identify them. My extensive research into credit cards has given me great insight as to which cards have the best approval rates for people with bad credit.

You see, credit cards come in different tiers. There are cards for people with poor credit. There are cards for people with fair credit. There are cards for people with good credit. And finally, there are cards for people who have excellent credit.

In "The Blueprint", I spoke of a few cards that I knew to have easy credit approvals so that people starting from a really bad place could have a better chance of being approved. Each of these cards can be used as a stepping stone to something better in the future.

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Payday Loans and Barbershops

Not very long ago, after a series of financial mismanagements, I quickly found myself caught in a web of payday loans that I so lovingly refer to as "Shuffles". I call them shuffles because you have to shuffle all over town paying off and borrowing again.

To call this task tedious would be the understatement of the year but after a while, you develop somewhat of a routine as you go about town shuffling from one payday loan store to another. Your visits become so routine that you inadvertently develop a working relationship with the staff who work there who by now greet you by name as you walk in the door.

Over time you find yourself sharing stories about your life and families, diets and kids, apartment, home, and job searches. You name it and it gets talked about in the payday loan store. It's the new age version of the barbershop or beauty salon. Practically nothing is off-limits at the payday loan store.

Obviously, you won't find this experience at every store, but the very best stores make you feel so comfortable that you don't mind coming back again and again. After a while, it's just like visiting an old friend...and this is by design. The more comfortable you are, the more likely you won't stiff them on a payment.

Needless to say, shuffles are expensive. To keep going back again and again, week after week, month after month is insanity. I found myself giving away hundreds upon hundreds of dollars in just interest alone. My monthly interest charges amounted to a car or house payment and that was on top of the loan that I had to pay back.

The thing that finally broke the cycle for me was the day that I walked into a store and I saw a husband and wife in line who had to be in their mid to late 70's. One sported a cane and the other in a wheelchair. It was at that very moment that I knew I had to stop the insanity and never shuffle again.

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Why Knowing Your Statement Closing Date Is So Important

In "The Blueprint", I spoke about the Prism Money Management app and how valuable it was in helping you to pay your bills on time each month. What I didn't mention is how useful it is for helping to raise your credit scores. Knowing your creditor's statement closing dates is vital to reaching your credit goals.

You're probably asking how can a financial app help me raise my scores when the app just reminds you to pay your bills on time. That's true. It does do that but it does so much more. It also allows you to pay each of your bills right from within the app, which is pretty cool in itself, but wait, there's more.

What the Prism app does better than anything is to let you know at a glance your statements starting and closing dates for each of your bills. The app makes them viewable all in one place without the need to log in to each creditor's website or needing to wait for your statement to arrive in the mail if you have not yet subscribed to paperless billing.

We all know that paying your bills on time is important, but it's "WHEN" you pay them that's most important. Let me explain. Your statement closing date is when your creditor reports how much you owe to the credit bureaus each month. Let's say that your credit card closing date falls on the 3rd of each month. You will want to pay as much on that bill as you can before the statement closes and your balance is reported to the bureaus.

If you know your statements closing date, you can use this information to determine which bills to pay first. For example: If you know that you're already past the closing date of a particular bill, then paying more towards this bill will do nothing to affect your credit scores because the balance has already been reported to the credit bureaus.

You can also give yourself a short term loan each month by paying all your expenses with a major credit card and then paying the balance off in full before the statement closing date on your next payday. Let's say that you charge $1000.00 during the first two weeks after payday. As long as you pay the balance in full before the statement closing date, then your creditors will report a zero balance to the credit bureaus, thereby lowering your utilization and raising your scores.

In contrast, if you carry a balance or don't pay anything towards that $1000.00 by the time your statement closes, then your creditor will report a balance of $1000.00. In this scenario, your utilization increases by $1000.00 which only hurts your credit scores because it shows that you owe more money, thereby, potentially lowering your scores.

Here is one very important thing to note. Only pay your bills "AFTER" your credit card statement is generated and never before. Paying before your statement is available is the equivalent of paying towards last month's statement instead of your current month's bill. This could make you think that your current bill is paid, but in fact, you only paid more towards last month's bill. Now, your creditor can report your current month's bill as late and unpaid.

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