Free Credit Report Repair Guide

Two out of three college grads go into debt. They owe more than $19,000 in student loans.  So students of higher learning are already learning the bad habits of debt. I know getting an education is considered an “investment”, so don’t get me wrong I think student loans are a “necessary” debt. But it does put a huge burden on the student once they graduate. They hope they can find a good paying job to pay off the loans. The reality is most don’t.

Here is a listing of state break down provide by the AP.

California: 56.4 percent of undergraduates taking out student loans, $17,266 average total loans, $15,259 average federal loans.
Connecticut: 62.4 percent, $17,990 average total loans, $17,143 federal loans.
Delaware: 56.1 percent $16,473 total, $12,946 federal.
Georgia: 65.4 percent, $20,767 total, $18,505 federal.
Illinois: 63.2 percent, $18,788 total, $16,594 federal.
Indiana: 61.1 percent. $19,112 total, $17,566 federal.
Minnesota: 76.3 percent, $20,312 total, $16,406 federal.
Nebraska: 71.8 percent, $16,200 total, $15,373 federal.
New York: 67.2 percent, $20,838 total, $17,603 federal.
Oregon: 76.5 percent, $17,772 total, $16,641 federal.
Tennessee: 70.9 percent, $19,949 total. $17,852 federal.
Texas: 64 per cent, $18,508 total, $16,624 federal.
All states: 65.6 percent, $19,202 total, $17,022 federal.

MasterCard goes IPO

What does this mean for people who have MasterCard? MasterCard raised $2.39 billion dollars in its initial offering this week. That’s a lot of cash. To give you and idea of how big this IPO was, Google raised $1.7 Billon in its initial offering.

So what does this mean for the average guy who has a MasterCard in their wallet? Well I guess this depends on your credit record.

If you have good credit it probably means you will get more great offers.

If you have bad credit it means they are now a publicly traded company that’s all about the bottom line. Which means they will need to make sure they stem any loses they face from late payments and charge offs. So I think you will see an increase in late charge fees, more aggressive collection actions and increase in interest rates on those who have less than perfect credit. But this is just a guess on my part.

By JOE BEL BRUNO of AP The reports the funds will be used in the following way; “MasterCard is expected to use its new status as a public company to expand globally, and move into higher growth businesses within the payment industry.”

Only time will tell. So please do all you can to get your cards current and paid off.

Debt is not the problem

I found this interesting article written by Robert Kiyosaki, the author of “Rich Dad Poor Dad” in which he says debt is no the problem, it’s what you do with it.

I agree almost 100%. Here is his example. “My banker is my best partner,” my rich dad used to say. “He loans me 90 percent of the money and I control 100 percent of the property, 100 percent of the profits, and 100 percent of the tax breaks. All I have to do is find great investments he wants to be a partner in.”
Very true.

He goes on to say, “Between 1995 and 2005, savers — people who saved money in bank accounts or in mutual funds — were the big losers. They lost because the stock market crashed. Between 1995 and 2005, many of the debtors who took advantage of low interest rates to invest in real estate made fortunes in the biggest real estate boom in the history of the world.

Understanding how to use debt to increase their fortunes is another reason the rich get richer. “
Again I agree.

However, most Americans are not like Mr. Kiyosaki. He uses debt to by assets that normally appreciate. Most Americans buy things that only depreciate.

He also sites a booming time in Real Estate. What happens when you are leveraged to the hilt in hopes the real estate market will go up but it takes a nose dive? Much like it did in the 80‘s, you will be in bankruptcy court faster than you know it.

Debt can be used to obtain wealth but in my mind the faster you can pay off the debt the better.

I found this interesting article on Yahoo Finance about the confusion of Credit Card Statements. They are written to help squeeze every last drop of money out of your pocket. They have a trigger clause in there that allows them to increase rates if your credit history is poor even if your card is current and you have never been late.

I also found out that even if your payment arrives on the due date it could still be marked as late and you will be assessed a late fee. How? Well if your payment gets there late enough in the day it will not be counted until the next day. Making the payment “late”.

Linda Stern points out a couple “tricks of the trade”;

“If your credit history profile changes at all, they can view that as a signal to raise your rates. Over-limit fees. If you have a $5,000 credit limit and you use your card to buy something that costs $5,010, don’t expect the charge to be denied. Instead expect your issuer to charge you a fee of $30 or more. Maybe you think that’s worth it for the convenience.
Due times, not just dates. Many, if not most, issuers now consider a bill late if it arrives on the due date after a certain time of day — typically before the mail is delivered. Then you can get busted for being late, a situation that can jack up your rate to levels over 20 percent and add another $30 or more in fees.”

These tactics are sad, but many credit card companies use them so fight back. Pay off your Credit Cards. Cash is their kryptonite!