If You Already Have A Number Of Cards, Try Canceling Ones That You Don T Use Any More, As Having Too Much Credit Available To You Already Will Be A Hindrance To Obtaining Further Finance

Category: Finance, Credit.

The past decade or two has seen a real boom in credit card use, with competition between issuers leading to ever lower rates of interest, and a consistent, constantly improving features relaxing of acceptance criteria.

Card issuers were also desperate for custom, such are the potential profits available to them from every customer, and so having your application approved was usually quite a straightforward matter. Such has been the activity in the marketplace that it s become quite normal for people to carry several cards, often building up quite a collection as attractive new offerings tempt them into making yet another application. This situation has seemingly come to a screeching halt, with many people finding that it s far more difficult these days to get a new card. The basic answer is that we re facing a global credit crisis, where banks themselves are finding it increasingly difficult to obtain the credit they need in order to finance lending to their customers. Why is this? The causes of this crisis are complex and beyond the scope of this article, but in essence the years of easy lending have come back to haunt the banks.

The banks thought that they had covered the risks of lending to these customers via a complex system of financial machinations, and so lent money with what many analysts now say was reckless enthusiasm. Lending criteria had become so relaxed that finance was extended to people who would never have been considered previously, because their credit profile made them a risky prospect to lend to. Unfortunately, many of these loans are now being defaulted on, leaving some banks facing huge losses, and the whole system of lending money is freezing up as financiers worry about who owes what and how much will be lost. This doesn t mean that you really can t get a new card with better features though- you just might need to try a new approach. This is feeding through into consumer lending in the form of higher interest rates and drastically raised acceptance criteria, making it much harder to have your credit card or loan application approved. Firstly, you may well have to lower your sights a little, and apply for one of the second tier cards rather than an all singing and dancing one from the best buy tables. Also, it makes sense to give your credit file a spring clean, making sure that it doesn t contain any inaccurate information, and that you don t have any overlooked debts unpaid that you didn t know about.

These elite cards are only available to the select few, and many people who were once considered prime customers are now slightly less than prime as lenders adjust their criteria. Sorting out any small problems of this nature will improve your chances of being approved. If you still have balances on these cards, then you may consider a debt consolidation loan to be a worthwhile idea, allowing you to get rid of those old expensive card debts and package them up into a cheaper and more organised loan. If you already have a number of cards, try canceling ones that you don t use any more, as having too much credit available to you already will be a hindrance to obtaining further finance. There s no telling how long the current financial problems will last, and indeed we don t know if we ll ever see a return to the days of easy credit, but by following the above steps you ll at least maximise your chances of having your application approved, whatever the future might bring.

Predatory Home Loan Sharks Are Coming Under Increased Pressure From Consumer Campaigners Concerned At The Number Of Australians Falling Victim To Rogue Lenders

Category: Finance, Credit.

Predatory home loan sharks are coming under increased pressure from consumer campaigners concerned at the number of Australians falling victim to rogue lenders.

The need to keep a roof over their head could leave some families vulnerable to lenders operating on the fringes of the credit market. It is feared the problem could get worse as interest rate hikes force struggling families to refinance their home loans. Typically, predatory lenders target people in financial trouble, such as a, who have assets home, but little ability to repay a refinanced home loan. Cases of predatory lending are characterised by high levels of default. Often the sole intention of predatory lenders is to strip as much cash from their victim as possible by charging very high interest rates, excessive commissions and charges. The Credit Ombudsman Service Limited has pointed out most predatory lending cases see borrowers default quickly, due to the high interest rates charged.

Often the tragic outcome for those who fall victim is the loss of their home and any equity they may have built up while repaying their home loan, causing real hardship for the families affected. Defaults sometimes occur as soon as the first month. The issue has become so serious that a coalition of consumer groups and financial industry bodies has been set up to help raise awareness and to help tackle the problem. According to Australia s Credit Ombudsman service, many victims of rogue lenders are vulnerable people who are less able to stand up for themselves. The coalition includes the Public Interest Law Clearing House, The Australian Banker s Association, the Consumer Credit, Legal Aid NSW Legal Centre, Abacus and the Mortgage and Finance Association of Australia. They are pre- dominantly people already in financial difficulties, pensioners, Centrelink recipients, non- English speakers or people with learning or mental health disabilities. Two sad cases highlighted by the NSW Consumer Credit Legal Centre show just what can happen.

Rogue lenders get around consumer protection rules, such as the Uniform Consumer Credit Code, by structuring loans to fall outside of the credit code s jurisdiction. An unemployed couple, contacted the consumer, with four children watchdog, after being stung by unscrupulous money men. The couple, who had fallen into serious arrears on their original home loan, also needed to raise money to pay off debts, register their car and convert a garage into an extra bedroom for an expected fifth child. The family had gone to a broker when their home was threatened with repossession by their lender. The broker, who had been informed of the couple s income, set up two high interest loans, one at a whopping 26% . The family ended up owing$ 65, 000 more than their original home loan, with little hope of ever repaying the debt. The broker was paid$ 15, 000 dollars in fees and commission on top of the lender s fees.

In another devastating case, who had lived, a migrant couple in Australia for 35 years, lost their home after going to a broker to refinance their home loan to repay debts incurred due to a family crisis. Home owners facing financial hardship and considering refinancing their home loan can get free, independent financial advice. The couple in their 60s had been repaying their home loan for 25 years, but after the broker arranged three loans in a couple of years they found they were unable to meet their repayments. They can contact one of Australia s state sponsored financial counsellors such as the Victoria state Consumer Action Law Centre , who are keen to help people avoid falling prey to the home loan sharks.

Credit Cards

Category: Finance, Credit.

Just about everyone knows what a credit card is. Do you know what a charge card is?

It's the little piece of plastic with which you buy and pay on credit. Do you know that the two are very different from each other? On the contrary, there are several differences between the two types of cards that determine how you use them and what you get out of them. Sometimes people are led to believe that a charge card and a credit card are the same thing. Credit Cards. It can be better to have a credit card because they have no annual fees and they allow you to pay off your debt when you like.

Credit cards are beneficial to you if you need to buy on credit and can afford to pay on a balance along with the interest fees. Charge Cards. They allow you to buy things that you cannot pay for now, but because of the periodic pay off requirement, it keeps you from getting into debt further than you can escape from. If you are the kind of person who would be able to pay off your debt when the card company requires it, charge cards are a good investment. Whether you are willing to pay on interest rates and be allowed a credit balance or pay annual fees and get great rewards is up to you. There are benefits and pitfalls to both sides, but if you manage either or both of them wisely, you will be able to reap the benefits they bring and control the expenses they incur. Depending on what kind of spending you need to do and how well you will be able to pay it back are big factors to consider when comparing the two types of cards.

Another difference is that credit card holders must pay interest fees. They only have to pay the minimum monthly requirement. This is because the card holders are not required to pay their debt in full periodically. Interest is where credit card companies make their money. One difference between a credit card and a charge card is that credit cards allow you to have a balance. Though they do not require you to pay your bill completely by a certain deadline, they do charge you interest for the entire time that you do not have it paid off.

Charge cards do not, because they require that you pay in full the amount that you charge on an annual basis. With a charge card, you must pay off the amount you owe periodically, no matter how great the amount is. This is how credit cards can be used for long periods of time without ever being paid off, though payments are made monthly that may reduce the balance, but never actually eliminate it. Credit cards give you the opportunity to pay off your balance whenever you want, but charge cards have more rewards. Depending on who the card holder is and what their spending habits are, preferences between charge cards and credit cards differ depending on the person. There is such a thing as a rewards credit card, but many charge cards outweigh these in benefits.

The different aspects of each can determine which one is the best for you.