Should you pay your credit card in full each month?

If you have the means, it is ALWAYS better to pay the card balance off in full each month but only AFTER the statement cuts. In other words, don’t pay the bill until you receive the statement telling you exactly what you owe.

A zero balance will always look better than carrying one no matter what anyone tells you. If you must carry a balance, then always pay more than the minimum amount due. I like to shoot for at least double the minimum payment and then round up.

Next to paying your bills on time, available credit is the most important factor in increasing your credit score. The more you owe your creditors the lower your credit score. The less you owe your creditors the higher your credit score.

Most professionals recommend that you keep your utilization at 30% or below but Ideally, your credit utilization should be at 10% or less than the overall amount of combined credit that you have access to.

I have recently put this through a test and have found that my credit score was much higher at 10% utilization than it was at 30% and even higher at 5%. Having said that, everyone is not in the position to pay their bills down that low so I’d say that 30% is a good goal to shoot for and anything less will make your scores soar.

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How do people with poor credit, get credit?

Granting credit to people who have shown a history of mishandling credit may sound counterproductive, but the reality is that this is a new era in credit and finance. In the past, a person with poor credit would never be afforded all the second chance opportunities to own a credit card that is made available to them today.

Nowadays, there is a credit card for everyone no matter what your current credit background but this does not come without sacrifice. You will pay a processing fee, a monthly maintenance fee, a yearly fee or all of the above, but you do what you have to do to get back on track.

When my credit went south, I had every lower-tiered, fee laced credit card known to mankind while trying to rebuild my credit and somehow I managed to even screw that up and defaulted on all of my second chance credit cards too! It seemed that I hadn’t learned much at all about credit but in reality, I did.

Even though I defaulted on my second chance at rebuilding my credit, I learned how to rebuild credit without actually doing it, and in fact, made my credit situation worse than it was before I started. I realized that I only failed because I was not mentally prepared to see the process all the way through.

Fast forward to today and my score hovers in the low 700’s because I was able to apply what I learned from my past failures at credit rebuilding. It took me about four attempts but once I had finally had enough, I was able to maintain my focus and follow the rebuild all the way through. Having a plan is great…Seeing it through is the hard part.

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Can you build credit with PayPal?

For the sake of clarity, a traditional PayPal account will do nothing to improve your credit score because it will never report to the credit bureaus, however, a “PayPal Credit” account which is financed by Synchrony bank, will report to Experian but no others. I know this because it appears on my report every month as SYNCB/PPC. It is a current account and has never been late.

I realize that some people are confused because there was a point in time before Synchrony Bank took over that the PayPal Credit accounts did not report to any of the three major credit bureaus. This goes all the way back to when PayPal Credit used to be called Bill Me Later.

I should also note that Synchrony Bank will rarely if ever give automatic PayPal Credit limit increases unless you purchase something over your current limit. If the cost is not too much over your limit, Synchrony will typically raise your credit limit enough to cover your purchase and your credit limit will stay at the higher amount going forward.

For example…My starting PayPal Credit limit was only $250 so I made a purchase of about $275 and Synchrony Bank increased my limit to $500 to cover my purchase and then some. I was able to keep my new credit limit even after I paid off my balance completely. You can also request a credit limit increase from the PayPal Credit website but so far I have not had any luck going that route.

You might also like: PayPal Credit

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Sprint and Collections

Sprint uses an internal collection agency that will work with you to negotiate a settlement on a lesser amount. If their inhouse collection agency is unsuccessful in collecting the past-due payment, Sprint will pass the debt to an outside collection agency.

If the outside collection agency is unsuccessful in the collection of payment, then and only then will the collection agency report your past-due debt to the credit bureaus. This affords the debtor a very generous amount of time to come up with a payment.

You might also like: GC Services Limited Partnership and Sprint

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A Message From HELL!

Many years ago, this one particular collection agency emailed me with threats like I had never seen before. I mean, these were not your normal, run of the mill threats…These threats were way over the top and one day I just got fed up and responded back with the vilest, most vulgar, and nastiest words known to mankind.

I wanted them to know that I didn't appreciate them contacting me with empty threats of having me arrested and hauled off to jail when they knew they could do no such thing and where just using scare tactics in an attempt to get me to pay off a past due payday loan that was several months to a year in my rear-view.

Within the hour I received an email reply from a man claiming to be the owner of the company who stated that he is running a family-owned business and has young children who read his business emails from time to time and would appreciate it if I did not use such vile language as he felt that it was very offensive to his kids.

To which, I responded that as long as he continues to send me empty threats, I will continue to reply back with language that demonstrates my displeasure in him contacting me. I made it perfectly clear that we can continue this email back and forth, or he could stop contacting me and I would gladly reciprocate by not responding. I never heard from him or his company again.

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Should you consider a payday loan?

A person should only consider taking out a payday loan if they are in dire straits and have no other options. I’ve probably taken out well over 500 payday loans since they have first become available and I am not proud of this fact, but sometimes desperate times call for desperate measures.

Payday loans are easy to get into but a nightmare to get out of. Breaking the cycle is very difficult because the average person who gets a payday loan usually takes out two to three more loans, perpetuating the proverbial robbing Peter to pay Paul syndrome.

At my very lowest, I had over 10 payday loans at the same time. It took me so long to pay them off and reborrow that it would take me two days to complete them all. At this point there are only a few ways out and paying them off was not an option for me. I ultimately ended up burning them all by closing my checking account and opening up a new one at a different bank. Again, not my proudest moment.

Today, I am happy to say that I have put traditional payday loans behind me. Just the sheer thought of the way I felt when I was knee-deep in them is usually enough to scare me back to reality in the event that it ever crosses my mind to seek out another payday loan.

You might also like: The Payday Loan Shuffle!

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The Dave Cash Advance App

I am a long way removed from the traditional payday loan system but I do from time to time use a mobile app called Dave that allows you to take out small cash advances of either $25, $50, or $75 until your next payday.

One reason why the Dave app is different from a standard payday loan is that you can borrow money without paying a single dime in interest. You pay back exactly what you borrow and not a penny more. They do offer the ability to leave a tip to show your gratitude but it is not required.

Dave is very simple to use. Once you have initially set up the account and connected your bank, you can generally have your money in your bank account in one to two business days without having to pay the optional fee for fast delivery.

In order to qualify for a cash advance, you only need to be 11 days or less from your next payday. The Dave app also has a checking account that you can opt into that will give you access to up to a $100 advance but at the time of this writing, it is not yet available.

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