Credit Card Improvement 101

 

credit card

Looking back at my views I notice that you guys seemed to be really interested in credit cards. I will be open and honest I only have 4 years worth of credit history, my score starting out around 700 and now I hoover over 790. I was just an average american with a credit card in college, and just worked it up from there. I have no mortgage, or student loans on my account, however I’ve worked with many people who were close to filing bankruptcy and helped them move there score over 100 points in 1 year! I also know the quick fixes that can improve your score by next month!

 

KNOWLEDGE IS KEY

If you can recite your phone number, or social security from memory you should be able to know what your credit score it, or the range it falls under. When you don’t know this viable information it’s easy for your score to suffer. Knowing is half the battle. What if your identity was robbed, what if there was a mistake on your report and your score is suffering from it. With many credit cards and app like Credit Karma you should be able to access your score rather easy. Once I did the research and put it to the test I was able to see direct impacts of my score going up.

 

NO DEBT NO PROBLEMS

We all know the saying more money more problems, well its opposite in the credit world. The more money you can have loan to you the better, but the trick is to only use it at a max of 30%. Everyone in life is out to win, and how the credit card companies “win” is they try to give you a 0% intro rate and a 5,000 limit. You then rack it up and by the time the year is over with, they hit you with a 24% apr rate. Ouch!!! The way to improve your score is only use 30% of what has been lend to you. This is called credit utilization. I myself love using my credit cards. I am all about the points and cash back, however I can’t just load my credit cards with bills and pay them off in full every month and expect my score to go up. I can only use 30% of what my card gives me to make my score improve. If you feel like you always spend over 30% ask for a credit limit increase, or until the time being work on self control and use 30% for the next few months and watch your score go up then ask for a credit limit increase.

 

PAY OFF IN FULL

Only put on credit what you have in cash. When you try to out smart the credit companies and charge your cards to get a higher score that can be great, until you have no cash to pay the full balance. When you get tempted and start paying the min, you will lose control and end up in a ball of debt. Make sure to only charge what you can afford. I tend to just put bills, gas and groceries on my card. I may have the credit limit to buy a boat but it doesn’t mean I need too!!

 

MULTIPLE ACCOUNTS

Credit cards help your credit score. When the credit companies see you only have 1 card and you may use it well. That’s great but it also put you in the high risk category as you don’t have enough credit to really asses your worthiness. I would start small and only open another account gradually as this has a small impact on your credit. If you have 650 plus credit and are using 30% of cards and notice your score not moving you can apply for another card. But please use caution this tip has more to do with someone who doesn’t have student loans,car notes, and more than 4 cards. I was one of those, I opened a new account and my score went up 11 points and 25 the month after.

 

ON TIME PAYMENTS

My mothers favorite saying growing up was, if you want to get paid on time you pay other people on time. You must always pay your credit card bill on time, the moment you miss one payment your score can suffer tremendously. If you hit hard times and can’t pay the full balance at least pay the min, its better than being hit with a late fee and interest. On time payments make up a huge factor in your score so don’t let forgetting to make a payment cause your score to suffer 100 points or more.

 

Your credit score is all about how you play the game. If you know the rules then you will be able to succeed and win. However not staying updated and educated on the requirements of your score will make it suffer.

 

 

 

 

Paying Down Debt VS Savings

debt savings

 

If you are young you probably have some form of debt. I believe one of the hardest thing about finances is deciding where to start and what to focus on. Sometimes you can be so far behind you feel hopeless. Although you may have no savings and a lot of debt there is an answer.

So if you don’t already know I graduated debt free and I was blessed to have a car given to me in high school with no car note. So yes I have no debt but my husband has a car and student loans, so we have been faced with dilemma do we pay the debt down or save money? The short term answer is pay debt, all the big financial advisers will tell you debt first. But I believe its much harder than that. Depending on your narrative will ultimately choose which path to take first. Look at all the elements I raise for you to ask and this will be a guide to let you know where to start.

 

GOALS

What are your short term and long term goals. Me and my husband want to have a house and we want it rather soon. After talking to a loan officer for a pre-approval letter, he wasn’t pushed back by the amount of loans we had. He was mostly focus on our credit and how much we made. When we told him how much we were going to put on the down payment and he ran our credit and was like ya “your good”. And in seconds we were on our way. Small hiccup it was contingent I went back to work making similar to my old salary, (but that’s another story). This goal we had showed us that we should be focused on the down payment, rather than paying loans. So if a goal of yours requires money right now then go for the savings.

 

INTEREST RATE

This one is rather simple, a good savings account can yield you 1.0% on your balance, an average credit card loan can be 15%. So if you have a huge balance on your credit card you should opt to pay that down first because it will net you more money in the end. You can also get savvy with the interest on things. My husband was able to put his loans in forbearance and have the government pay on the interest, and we put our money to the car loan which is at 4%. Its all about finding the most efficient way to make your money work for you.

 

KIDS

Do you have kids? If so save save save, those little suckers are so cute but can literally brake anything in your house, get sick, etc. You will defiantly need a small savings to make sure you can cover small emergency. Also if you go ahead and save 3 months of living expenditures and you lose your job you wont have to worry about putting everything on credit. When your single or married with no kids, your focus should be a “debt free” mindset.

 

BEING BLACK

Yes I said it, if you are black I would push for you to at least get 1-2 months of living expenses saved. Why? Well our income disparity is out of whack, last ones to get picked for a job and a whole bunch of other stuff that shows how racist this world is. I say all that to encourage you to make sure your money is okay. If your boss calls you the N word, and you have $0 saved with a child to feed your less likely to leave. If you find out your getting paid half the salary as someone without the education as you but you wont make rent if you leave then you will compromise. As someone once said “black people always make sure you have some F-U money. “

 

TRY BOTH

This can take some practice and I will admit its A LOT of work. But if your up for the challenge do it. Make a goal you want to have save and how much debt you want to pay, then rotate each amount every month. So lets say you have $300 each month to either save or put towards debt. One month delegate it to savings the other month double up on your car note or student loan. This way you will have a little money saved but feel like your one step closer to being debt free.

 

Confused? If so, its okay which ever option you choose will be better than doing nothing. The difference is buying an item on sale and being happy about it, too find out next week its 10% cheaper. You might be mad that you didn’t get it at it lowest, however you didn’t buy it full price. Looking back on your financial decision you will be glad you started either path even if your like darn I should of paid the car off first. You live you learn and that’s the beauty of life!

Black Wealth In America

I have for the life of me tried to understand black people. As a child I grew up in a home where my mom was the definition of frugal. But I always just thought that many people who didn’t have money was the same way. It wasn’t until I got married and started cooking when my husband was like why are you skinning, and slicing the potatoes for fries, you can just go buy them pre cut… hmmm I thought really. Or when we were in target getting toilet paper and he was like look what about buying this roll of Charmin, I was like well do we have Charmin money.. NO. Lets get this angel soft and roll on about our day. However I will admit there is nothing like a nice cup of espresso from Starbucks. But why is it that wealth in the black community is a downward spiral. Buying jays and good toilet paper can’t really make the difference in our wealth.. can it? Its a question that has always intrigued me. I understand we make less than the average white man or because of racism. But why over years of us getting more rights has our money gone down the hill. How can our wealth gap be widening but we are more educated than ever before?  Blacks spend their money and don’t save is because systematic racism prevented them from safely investing in banks, and is currently impacting their ability to own property, land, or businesses, thus leaving them with nothing to pass down to future generations. They were forced into a mindset of poverty–spend now before it’s gone, impacting them generationally. Historical experiences blinded African-Americans from recognizing the importance of financial literacy and because of their monetary ignorance, blacks possess the least amount of wealth in America.-Blackmeninamerica

Why yes, I couldn’t agree more. Back in the day living paycheck to paycheck, was a good thing it meant you had money and you could survive. You were not allowed the opportunities we have today. Owning land, starting business, earning interest all those things were foreign years ago. Spending was what we new best, it was fresh to us. Now back then I understand, but 2017 I do not.

This type of mentality drives me crazy. The fact that we still think its okay not to save and live paycheck to paycheck is a problem. Its a problem that we (black people) have the lowest percentage of wealth in this economy. Why yes we do get paid less than the white man but not low enough that we cant even save 10% of our income. When looking at the wealth chart it should make you cringe. We are more educated than ever, how come we are not growing our wealth.

I am not here to judge, I am here to open the discussion. I started the urban wealth because I saw a need. I love budgeting and saving money and I knew my people are smart enough to learn how to make their money grow, but I never could figure out why we don’t. Please leave a comment below on what you think are the reasons why we don’t save and grow our wealth.