About 12 years ago, I started my first business with 0% loans from my credit cards. I had good credit and received at least 5 pre-approval offers per week. So I decided to use my good credit to finance my first business. I needed $20K so I charged all the start-up cost on my credit cards. When the first bills arrived, I applied for two new 0% balance transfer credit cards. When those promotional rates ended, I simply transferred the remaining balances to a new 0% credit card. Those offers saved me thousands in interest and helped me get my first taste of entrepreneurship. Without it, my life could have been very different.

I’m sharing this to illustrate that balance transfers can be a very useful way to save money if you are responsible and diligent. But I’d like to be very clear, I’m NOT advocating people do this as it was very risky for my credit, my business, and my family.

Today, credit card companies have added balance transfers fee and instituted other terms to discourage my past behavior. But savings still abound if you know how. Here are some tips and secrets to making the most from balance transfers credit cards.

• Different Rates for Purchase and Balance Transfers. One of ways credit card companies make 0% balance transfer rates profitable is that they charge a higher rate for purchases since they pay down the balance with the lowest rate first. The credit card companies hope you use your new card for purchases as well as the balance transfer. That way, all your groceries, gas, and other new purchases will be accruing interest while your payments are applied against the 0% offer. My suggestion to circumvent this pitfall is to use different cards for different activities.
• Balance Transfer Fees. Most credit card companies now charge a balance transfer fee of 3%. While this makes your balance transfer less valuable, a 3% unsecured loan is still great (assuming 12 months at 0%). In addition, many cards will have a max fee of $90 so if you transfer more than $3,000 you will essentially be lowering the balance transfer fee rate.
• Pay your Bill On Time. Many cards will immediately cancel your balance transfer rate if you are late on a payment. In fact many, credit card companies count on it.

Finally, use your credit responsibility. You should only go down this path if you know you have the self discipline to pay down your debts. Another word of caution is that balance transfers will most likely lower you credit score since you will have an inquiry for a new credit card also credit cards with high utilization will lower your score. But in many ways, credit is supposed to be used for your financial advantage. I personally don’t mind lowering my credit score temporarily for a few hundred or thousand dollars in savings.

Yesterday, the Fed lowered the federal funds rate rate to near zero in an attempt to bolster the sagging economy. The federal funds rate is an overnight lending rate that banks use to set rates for a variety of loans such as adjustable rate mortgages, credit cards, and home equity lines.

For many consumers with variable rate loans, they should see a monthly savings. For example, a family with a prime indexed home equity line of credit would see their interest rate lowered from 4.00% to 3.25%. On a $50,000 draw, their minimum monthly payment would decrease  from$167 to $135.  The same types of saving could be seen in variable rate credit cards however the effect may not be as pronounced since credit card rates have a higher prime plus index.

For the consumers who wonder if this is a good time to refinance their homes, the answer is not so clear. While the goals of the Fed is to lower long term interest rates, their recent moves only lowers short term interest rates. 30 year fixed mortgage rates are consider long term interest rates and often indexed to the 10 year treasury. While the rates on the 10 year treasury are also at historic lows, the credit credit crunch has more lenders charging higher premiums eroding the value of the historically low rates.

So what should you do in this environment to save money? Here are some tips:

If you have a home equity line of credit, consolidate your bills. If you have good credit and an open HELOC, consider consolidating your credit card bills and other expenses. With a prime rate of 3.25%, you will rarely get another opportunity to get such a low priced loan. The caveat is that rates may rise in the future so make sure you have flexibility to move debt around. You are also using your home at collateral so be careful.

Shop for credit card rates. Not all credit card interest rates are variable. If you have a fixed rate credit card from when prime was 6% or 7%, this could be a good time to look into a new card with a lower rate.

Stay on top of this market and interest rates. We are at an historically low interest rate period. As the Fed looks to unfreeze the credit markets, there could be unprecedented opportunities to refinance or purchase a home assuming you have good credit. This period won’t last forever so be savvy, stay on top of the market, and look for your opportunity to save.

As loans from traditional banks become harder to get, more consumers are looking into credit unions in hopes of getting the loans that they need. There are a few pluses and minuses that come with joining a credit union and it is important to know what you are getting into before you sign up. Let’s take a look at credit unions and see what you can expect.

1. Loans are easier to get.

This is probably the main reason that many people do decide to become members of a credit union. As the name implies, their main purpose is to offer credit to their members. If you have reasonably good credit, or have only made a few mistakes and your credit score is still decent, you should not have any difficulty getting a loan from a credit union. If this is a high priority for you, then joining would be a good idea.

2. No businesses allowed.

Credit unions are typically only for consumers. There may be a few exceptions to the rule, but generally, if you have a business, you’ll have to set up a separate account for it somewhere else. This isn’t that big of a hassle, but if you like to keep your money in one bank, it can be annoying. The primary purpose of a credit union is to serve consumers individually, not as companies. In addition, getting a business loan from a credit union is next to impossible, even if you are applying as an individual.

3. Loan amounts will be small.

Credit unions typically only lend out on smaller loans, usually in the $10k range. You may find a few that are willing to go over that, but this is a general guide to the type of funding that you can expect. That basically means that while they may be good for a small personal loan or a used car loan, anything over that will be tough to finance through a credit union. These loans are definitely not suited for home purchases.

4. One on one help.

Credit unions typically limit their members and they do offer additional services to those that they accept. For example, many will offer free credit counseling or other services that can help you find your financial footing, or keep it on solid ground. For those that are looking for a little extra attention and help with their money, a credit union can be a very good choice.

5. Limited membership.

The downside to credit unions is that they do have limited memberships available. Some may only accept specific kinds of people, such as fireman, military members or similar professions. If you are applying to join a credit union, make sure that their charter is broad so that you have a better chance of being accepted.

At the end of the day, the choice to join a credit union can be beneficial, especially for consumers that need easy access to loans and financial advice.

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Maintaining a household budget entails a lot more than just taking care of basic necessities and ensuring that there is money left over for the purposes of entertainment. In fact, maintaining your budget in this fashion is what is going to get people into debt. Most people earn money and then end up spending it right away, letting every dollar that comes in go out just as quickly. Individuals are beginning to consume every single penny that they earn, and many people even spend more than what they are earning, spending far beyond their means which allows them to fall into a serious hole of debt. A household budget is actually a powerful, effective tool for overcoming debt, reducing debt and staying on track financially.

Household budgets are excellent for helping to reduce debt.

Your household budget is essentially designed to be a set of instructions that you and your family can follow. This will allow you not only to maintain your current expenses, but also to reduce your debts as quickly as you possibly can. The faster that you are able to pay down and pay off all of your debts, the sooner you will be able to breathe easy, knowing that you will get to keep more of the money that you earn than ever before. More important than ever, imagine how much money you will be saving without having to worry about finance charges, late fees, interest rates and other completely unnecessary expenses every month.

The longer that your debts are able to remain in force, even if you are making payments against each of your debts, the more money you will end up paying in interest. Interest accrues against outstanding principal debts based on percentages. If you have less outstanding principal on your debts, then less interest will end up accruing. The faster that you are able to reduce all of your debts, the more quickly you will be able to stop paying all of that interest. Creating a household budget, then, will essentially allow you to create a debt reduction budget. It will allow you to make sure that you are getting your debts paid down and paid off completely much more quickly than without having such a budget in place. What this means for you, is that you will save as many as several thousand dollars simply by cutting off that accrual of interest as quickly as you possibly can.

There are many benefits to implementing a solid household budget, because it will do more for you than simply aid in reducing your debt. Implementing a household budget will also help you build up your savings, and will give you the ability to buy things that you need without using credit. Having a good household budget will also assist you with long term savings so that you can deal with unexpected expenditures no matter what happens over time.

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Have you ever been told to “always look your best”? The same should be true for your credit. You should work to make sure that your credit always looks its best as well. Here are ten ways that you can approve the appearance of your credit.

1 - Pay down your debt.

This is one of the fastest ways to improve your credit by decreasing your credit available to credit used ratio, paying down the balances on the higher interest credit accounts first. If you are using more than 50% of your credit, then you are using too much and need to start paying some of it off for better results.

2 - Use secured cards to make an entrance into the world of credit.

Most banks and credit unions offer secured credit cards, which are excellent for helping you build credit even if you don’t have much to speak of just yet.

3 - Apply for a passbook loan.

These are month to month loans that use your savings account as a means of collateral, which is a great way to show lenders that you are capable of paying off the loan even if your credit is less than ideal. Some banks don’t report passbook loans to the credit bureaus so check with yours.

4 - Utilize retail store credit cards wisely.

These cards are relatively easy to get and can help to build your credit appeal. You can use these cards for purchases that you can pay off right away and build credit in the process.

5 - Keep old accounts open.

Closing an old account is something that you will regret, so even if you are not using the account, leave it open or it could have a negative effect on your credit.

6 - Properly utilize the 100-word Statement.

Under the Fair Credit Reporting Act, you are allowed to add 100 words to your credit bureau file, and this can be utilized to improve your credit image. Just keep in mind many lenders will just review the credit score and ignore any statement.

7 - Perform occasional checkups on your credit report.

By reviewing your credit report from time to time, you will be better able to keep track of changes to prevent negative things from showing up.

8 - Protect yourself from identity thieves.

Identity thieves can wreak havoc on your credit, so it is vital that you take steps to prevent your identity from being stolen if you want your credit to be appealing to lenders.

9 - Maintain good record keeping habits.

This is going to mean attending to your checkbook as often as possible, devising a bill paying system that works for you, and above all else, always paying your bills off on time, every time.

10 - Get professional help, if all else fails.

The two primary sources of help are your attorney, and a legitimate credit counseling company. If you cannot make your credit more attractive on your own, these two sources of help could be just what you need.

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Are you financially prepared for disaster? Answering this question may not be as easy as it seems, because there are a lot of different considerations that go into preparing yourself for one of many different disasters that can occur. For example, are you financially prepared to handle a natural disaster like a floor or a hurricane? Are you financially prepared for a financial disaster like becoming disabled or losing your job unexpectedly? Are you wondering what goes into determining your financial preparedness for different types of disasters? Here are some tips that may help you become more financially prepared to handle a variety of different disasters that would be taxing on your financial stability.

- Do you have an emergency fund, or a rainy day fund?

Most people have trouble putting away money for emergencies because they do not put enough thought into the types of emergencies or disasters that can occur. Have you put consideration into how you will deal with emergency home repairs, auto repairs, health and hospital costs or other expenses that can crop up quickly and without warning? Having an emergency fund is absolutely vital if you want to weather the storm that comes with these types of financial emergencies. If you become sick or lose your job unexpectedly, will you have enough money to cover your mortgage or keep gas in your tank?

- Can your credit score accommodate for an emergency loan or line of credit if you should suddenly need cash quickly to tackle a disaster or an emergency?

If your credit is good enough that most lenders will work with you, then you can consider yourself to be protected. If you do not believe your credit is good enough or if you’re not sure, it might be wise to take out a credit card now that you will only use in absolute emergencies.

Being financially prepared for disaster does not necessarily mean having thousands of dollars floating about waiting for a reason to be used. What it does mean, however, is anticipating potential disasters or emergencies that could come up, and responding to that risk by preparing accordingly. Having a few hundred or a few thousand dollars saved up in advance can really be useful should an emergency come up that prevents you from working, or that requires that you spend a great deal of money on something like home repairs, car repairs or medical bills.

If you do not know the answer to the question “are you financially prepared for a disaster?” then it may be time that you sit down and really figure out how much financial preparedness you have and need in order to combat any emergencies or disasters that may come up over time. This is the best way to make sure that you always have enough money for a rainy day, or to tackle a period where you need more money than you are currently making.

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The peak holiday shopping period is right around the corner. In a tough economy, any saving is a nice bonus so we compiled a list credit cards with 0% APR for 6 or 12 months on new purchases to help consumers stretch their Holiday shopping dollars. Combined with the 0% APR, the rewards and cash back features could save you hundred dollars this holiday season. Here is a short list of the cards you may find useful. Keep in mind you will need good credit (640+) for most of these offers.

Consumers with Good Credit

Student Cards

Keep in mind that credit cards should be treated as a convenience and used responsibility. As such, we suggest using these cards as a way to make cash back or other rewards on gifts from your list. If you don’t think you have the discipline to pay off the balances during the 0% APR introductory period, we strongly suggest using cash.

Here are a few more tips to help manage your credit and credit cards this holiday season.

1. Don’t Apply for Too Many Credit Cards. Too many credit inquiries are bad for your credit score. As such, do your research first and find the right card based on your credit score and your spending habits.
2. Know the Details. Some cards have great rates for purchases but poor balance transfers rates or vice versa. Virtually all cards pay the balance with the lowest APR first. That means if you have a Balance Transfer of 0% APR and a purchase rate of 15% APR, all your monthly payments go towards paying off the lower APR balance transfer first while your purchase balance keeps accruing interest at 15% APR. Don’t fall for it! Be smart.
3. Keep Credit Card Utilization Low. If you carry a balance, make sure it stays below 35% of your credit limit on any single card. Carrying a balance higher than 35% could negatively impact your credit score and possibly increase the interest rates on your existing cards.
4. Pay On Time Each Month. Most credit card companies are counting on you to be late on your payment. Don’t get caught paying late fees or giving credit card companies the right to increase your APR. Pay on time or even a couple days early!

There is still money available to be lent out, but in order to get it, people buying homes and businesses must have good credit or plenty of equity. Despite all of the talk surrounding the credit market which is supposedly completely frozen, it is still possible for consumers to pick up big ticket loans all over the Las Vegas Valley and elsewhere, provided that they can meet the terms which are much more stringent now.

According to a local branch manager for U.S. Mortgage of Nevada, nobody is going to offer 100 percent financing right now. If they did offer 100 percent financing, it would come with at least a 17 percent interest rate if not much higher. And if you want to take out a loan so that you can make a purchase of real estate for a company, you are going to be paying down a much greater share than if you were to buy that real state only twelve months prior.

Before granting a home mortgage to a consumer, Wells Fargo bank uses several different criteria that they examine for each of their loan applicants. These criteria include debt to income ratio, credit score, two years worth of W2 tax forms, two months worth of bank statements and payroll stubs. Just about anyone would have been able to get a loan two years ago, but today most lenders are being much more prudent in order to protect themselves.

A poor credit score is more than enough to doom an applicant, even when they have enough money to make a down payment. Major banks are rejecting mortgage applications from individuals with credit scores in the 500s, but by raising such a score to 650 or more, those individuals can suddenly qualify for Federal Housing Administration loans. Meeting new thresholds is absolutely essential if you want to obtain the lending that you need despite the credit crunch and the tighter reins that lenders are holding on their money.

Some lending institutions like Nevada Bank and Trust have taken truly black and white approaches to lending. Even people they know are reputable are losing out to hard line decisions because of how tough the credit market is right now. Small businesses used to easily secure loans of 80 percent or more of the total cost of real estate, but now the numbers are much lower, at 75 percent for owner occupied real estate, 70 percent for investor owned properties and even less for specialty operations. It isn’t just the banks that are playing it safe, but all lending institutions out there.

What it really boils down to is what your credit is like. If you have top tier credit, not even the credit crunch can bring you down. It’s all about having good credit and keeping your credit score up if you do not want to be negatively affected by the credit crunch.

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Because of the problems facing our economy, most consumers are finding it difficult to obtain the lending that they need for things like purchasing a new car. However, what consumers are failing to understand is that the auto makers and car dealerships are experiencing the exact same issues relating to the economy, and are just as desperate to unload their inventories as you are to obtain a new vehicle.

With the current state of the economy, many people are facing poor credit or borderline credit scores, making a new car loan seem like something completely unobtainable. On one hand, consumers are definitely hurting when it comes to obtaining lending, and lenders are starting to cut back on the loans they are offering because of the state of the economy. On the other hand, these car dealerships and other potential lenders are desperate to unload their products to boost their sales and profits, which means that car dealerships are going to have to offer loans and other special offers to consumers if they want to keep their profits from crashing. Here are some brief tips for buying a car despite the faltering economy:

Make sure that you have an adequate down payment.

This shows the dealership that you are serious about buying a car. Your income may not be great, and you may have not have much in savings, but the more you present as a down payment, the better off you will be when it comes to obtaining a loan for the vehicle you want to purchase.

Check with local banks for funding assistance.

Rather than attempting to deal with the nationwide large names check out your local banks. It is the large name banks that are dealing with the most financial issues, and obtaining lending from them will be near impossible. Smaller, local banks are not seeing nearly the same impact and will be more likely to lend to worthwhile consumers.

Shop around on the internet when looking for a car loan.

The internet has numerous opportunities beyond what you will find in person through local auto dealerships. Most internet lenders are much more likely to lend the money that you need to purchase your new car.

Shop around for the right financing before you start looking for a car rather than choosing a car first before seeking financing.

Take your time when shopping for adequate financing, instead of rushing at the very last moment when you have the car you want but not enough money to purchase it.

The bottom line is simple: Auto dealerships are feeling the economy crunch just as much as consumers are. For this reason, they are still likely to offer auto loans and sell vehicles, but only if you are willing to think outside the box a little bit. If you follow the aforementioned tips, you should have no trouble obtaining financing from companies that are not being affected in the same way by the mortgage crunch. Combine special deals from desperate auto dealerships with auto loans from smaller, local banking and lending agencies and you should have no difficult obtaining the lending that you need to purchase the vehicle that you require. Walking into a dealership with an already approved loan is an excellent way to gain leverage over the auto dealerships to get the vehicle that you want at a price that you can handle.

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Because the economy is sinking, we are finding that credit scores are rising significantly in their importance. In today’s apparently struggling economy, creditors are tightening the reins when it comes to how they lend. This is leaving many people to wonder if their credit is still good enough to seek the lending that they need when they most require the assistance. According to many credit counselors, however, credit scores are becoming drastically more important than before because a credit score level that was good enough to get a loan in the past is probably not going to cut it as easily today.

Experts working with credit counseling companies are saying that a struggling economy is going to mean that loans are that much more difficult to get. A lot of people are seeing their credit scores dropping at the same time that many creditors are simply going to demand higher scores in order to obtain lending, which is going to be a double whammy for a lot of people.

A credit score is basically an average of how good or bad your credit is. It can affect the results when you are applying for a loan, and can mean a higher interest rate or no loan at all if your credit score is not good enough. Credit scores run from 300 to 850, but only 11 percent of the population can score 800 or higher. If your score is above 720 then you are doing just fine in general, so do not worry about your score if you are above this amount.

Here are some suggestions for keeping your credit score up, even in an economy that appears to be falling apart: For starters, pay your credit card bills on time, because debt that rolls over from month to month can really hurt you. If you have $1000 run up on a credit limit of $2000, you might think you are doing ok - But using half of your available credit is actually a score killer and can be doing much more harm than good if you are not making a real effort to get it paid off as quickly as possible.

Closing a credit card account is never going to help you raise your credit card, so keep them open even if you are not actively using them. If you have low credit or bad credit you can still obtain a loan, but it will really depend on the lender, the down payments and the interest rates that you find yourself facing.

Simply put, credit scores and reports are becoming even more vital than ever now that lenders are becoming stricter about what they lend and who they lend it to. If you need a loan or a credit card, you absolutely must have a decent credit score if you want to get anywhere without incurring enormous interest rates and fees in the process, so plan ahead.

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