Factors That Credit Card Companies Look at When Evaluating an Application
There are a lot of people who have credit card debt. I have had my fair share of problems in the past. We keep on making the same mistakes over and over. We spend more than we should. We try to pay it down as much as we can, but somehow we fall short of that goal.
We tell ourselves that we have learned from our mistakes, but we keep making doing the same thing. Armed with the same knowledge, maybe a little bit more, are we learning from the past? I ask myself that question every day. Does any of this sound familiar to you, guys? I have a list of some simple tricks that have helped me out in the past, and maybe, they can do the same for you.
Do you have an emergency fund? We get asked this question a lot. I am guessing that only a select few follow through with this idea. Sometimes it is not for lack of trying. The problem sometimes is that we just do not have the money for an emergency fund. I know I do not. Money has to go for rent and bills, maybe a few luxuries here and there. We try to pay down our debt but cannot. How can we pay down our debt in full when we cannot even afford the money for an emergency fund?
What can we do?
Try to establish some kind of fund with some extra money every month. That might require you to cut back on some extra spending here and there. It will pay off though. Sometimes it is better to sacrifice a few things now to have money for what you need in the future. I am still working on that one too.
2)What Can You Afford
"Sometimes our alligator mouth overrides our hummingbird butt."
This is an old southern saying, but it applies to the situation. We oftentimes buy things we cannot ultimately afford in the long run. We get so excited that we have the means to buy something. We forget that we cannot always pay the bill down on time. We are then stuck with an item we have always wanted with a bill we cannot afford.
What can you do?
Try to limit your cart to smaller purchases. That way can pay it down right away. I have made this mistake too. Now, I only charge smaller increments. You might have to sacrifice something you want to avoid making the debt go higher.
"If it is meant to be yours, the item will still be there when you can afford to buy."
Do you have the cash to pay for it right now? No? Well, you cannot afford to charge it then, either. I had to learn the hard way.
That is one area where I am very good at. I always make sure to make a payment, even if I can only afford the minimum. Some people are not as lucky. You have to try to make a payment when it is due every month, even if it is only the bare minimum. One missed payment can spell havoc for your finances.
Some companies will hold that one missed payment against you for life as if they never made any mistakes. You cannot throw the bill away hoping it will all go away by the morning. I know some of you have tried that before. I am guessing it did not work out so well for you, did it?
Keeping up with your payments will, at least, prevent a black mark on your record. They care less about the amount you owe and more about keeping up with your payments.
4)I Will Just Transfer My Balance To A New Card, Then
Yeah. That is not going to work out well either. Some people do that to avoid their due dates. Your due dates are still going to catch up with you. There is no way to avoid it, so avoid doing that.
The only reason to transfer your balance to a new card is to get a lower interest rate. Some card companies will do that to help their clients out, but you still owe the same amount that you did the last time.
Transfering for the wrong reason could land you with a higher balance. Some cards will gladly let you transfer your balance over and then charge a nasty fee for the privilege. Once again, that is another example of how they make money off of you. Only take this route if you have no other choice.