Banking and Credit

Credit is everything, from getting your dream house, car, to securing that dream job. Banking and credit has become an essential part of today’s lifestyle, promising easier options that let you buy now and pay later. Your credit history is like a name tag you carry around your neck and it really hurts not to have a good banking and credit history.

How important is having a banking and credit?

If you’re one of the many people who are renting, employed, and paying bills, chances are, banking and credit are indispensable part of your daily living. When you have a credit, it stretches your buying power, letting you buy things at even lower prices than having to pay in cash. Still, there are a small portion of people who choose not to have any credit, out of religious or philosophical reasons. These can be divorcees, widowers, or retirees who don’t have a need for a credit. Having no credit can never be compared to having a poor credit history. In the end, it’s a matter of personal choice.

Banking and credit are at the core of every financial transaction done on an individual or commercial basis. You can take advantage of its powers by knowing these twelve important facts:

1. There is nothing to fear with electronic banking and it can make your payroll experience a breeze through direct check deposits.

2. Open a checking or savings account and pay your bills on time to make a good credit history. Your finances are your responsibility, so take care of it by keeping a watch on your income and debt ratio.

3. Don’t be deceived by computing bank fees on your credit and returns made by your security deposits. Are you really saving? Are you earning higher yields?

4. Learn linking. Tie up your credit or checking account to your savings. This will help you avoid overdraft fees when you suddenly lack funds for an emergency transaction.

5. De-clutter your accounts and combine various accounts with the same financial institution. Keeping too many credit cards can mean various due dates and constant monitoring. If you can manage with one, cut off the others.

6. Online banking deposits can take time for it to be available in real time. Same goes with payments made online. What you see on your screen takes hours to days of being updated for real. Always give time allowances when doing online banking.

7. Invest your money in a savings account that gives higher yields.

8. Arrange your due dates with your credit card company to sync with your paycheck schedule. Missing a payment can lessen your credit score by 100 points.

9. Remember that bank fees go up each year and it is wise only to use your credit when it is necessary. Sort out your priorities for you to have less worries when interest rates go high.

10. Limit doing credit card transactions when you’re abroad. You can incur foreign exchange, overseas transaction, and purchase fees when using your credit card outside the U.S.

11. Put your money where it will earn the most. There are many ways where you can expand your investment other than keeping them in a savings account that earns only 0.5%. Sometimes, smaller banks offer better deals since many big banks are consolidating with other banks, which can mean higher fees for their customers.

12. Monitor your expenses. No matter where and how you use your credit, it is always important to keep track of it so you can forecast how and when you will pay it in full.

Managing Banking and Credit

Banking and credit can be easily managed by using softwares like Microsoft Money and Quicken. You can use it to download your financial transactions, save them as a file, and plan your finances. Banks have used credit as a tool to help them qualify a borrower for a loan. There is no need to be scared of credit, specially with the new regulation in July 2010 that will give consumers extra credit protection, shielding you from late payment charges. Besides, you might need an emergency fund and a credit can help a lot when money is short. Banking and credit is the future of finance and as early as now, play your part in it very well.

RESOURCES:

Weston, Liz Pulliam. “ 10 Ways to Simplify Your Financial Life. “ April 2009. MSN Money.

http://articles.moneycentral.msn.com/Banking/BetterBanking/10WaysToSimplifyYourLifeIn2008.aspx

Dratch, Dana. “ Life Without Credit: Tough and Expensive. “ 2009. Bankrate.com.

http://articles.moneycentral.msn.com/Banking/CreditCardSmarts/LifeWithoutCreditToughAndExpensive.aspx

Care One Credit Counseling. “ Why You Need a Good Credit Rating. “ 2009.

http://www.careonecredit.com/Knowledge/Article.aspx?article=137

Rendon, Jim ( Smart Money ). “ 10 Things Your Bank Won’t Tell You. “ March 2009. MSN Money.

http://articles.moneycentral.msn.com/Banking/BetterBanking/10ThingsYourBankWontTellYou.aspx