The dark side of personal finances


5 Ways Poor Credit Scores Costs You Extra Money

5 Ways Poor Credit Scores Costs You Extra Money

Most of us want a good credit report to obtain automobile financing, credit cards, and to purchase a home. But, beyond these consumer loans, your credit report can cost you in everyday living expenses. What you don't know about your credit could be costing you money.

Having a credit card means that you can order tickets, rent a car, and reserve hotel rooms. Besides these conveniences, your credit report can mean that you must pay higher deposits and fees for everyday services.

Did you know that your credit history can keep you from getting utility connections, good telephone rates, the best auto insurance, home owner's insurance, or even keep you from getting hired?

1. Some utility companies set minimum standards for service connections. If your report shows collection accounts for prior utility bills, you may not be eligible for service at all. And if utility companies do agree to connect your service, you'll need to pay a higher deposit than another customer with good credit who may not need to make any deposit.

2. The same requirements exist for telephone services. People with a good credit history don't need to pay deposits for home telephone or cell phone services. When we first got a cell phone with poor credit scores, we had to pay a $300 deposit, for one cell phone. After fixing our credit, we got eight cell phones for our business, with zero deposits.

3. What many people don't realize is that good credit enables them to get better insurance rates. High-quality, low-cost home owners’ insurance, auto, and life insurance companies set minimum credit standards for their policy holders; this means that consumers with poor credit have to pay more for less coverage. Many automobile insurance companies now base your monthly premiums on your credit score; these companies offer a 17% discount if your score is over 625 and a 25% discount if your score is over 725. Why? Because according to their studies, people who are careful with their credit are also careful with their property and careful drivers.

4. Bad credit can cost you a job. More and more employers run an applicant’s credit report and hire the person with better credit, assuming that better credit equals better integrity and character. A friend of mine with a Master's Degree and a 4.0 grade average did not get hired; she was told her credit score didn't meet their minimum standard and that they hired another person with less education.

5. Poor credit scores means you pay more for your home financing. Mortgages cost more in upfront fees and interest rates for those with low credit scores. How much can you save? A mortgage loan of $150,000, 30-year, fixed-rate mortgage, interest rate of about 5.72 percent costs around $870 a month; poor credit scores raise the interest rate over 9 percent and the payments over $1,200. As you see from these payment differences, good credit means that you can finance a more expensive house with the same income, or save $330 each month.

Boost your credit score so you can save money on everyday expenses, get high-quality insurance, and the best mortgage financing.

American Express Credit Cards Getting the Most Out of International Travel

American Express Credit Cards: Getting the Most Out of International Travel

Copyright 2006 Edward Vegliante

Have you ever eaten at an expensive restaurant in a foreign country and watched as the waiter sneered at your Visa or MasterCard? Believe it or not, this is a common experience for international travelers, especially those who finance the trip with their business credit card. In the United States, currency is currency, but in other countries, how you pay can have a direct effect on the service you receive. Founded in 1850, American Express has grown into the preferred financial center overseas, and provides a variety of options for international travelers.

Hotels, Retailers & Restaurants

When traveling internationally, it is always preferable to have your American Express card handy for purchases at hotels, retailers and restaurants. Business owners and their employees have come to trust the American Express name, and while some accept Visa, MasterCard and Discover, many establishments frown on the use of these credit cards. Since there are thousands of financial centers in nearly every country, business owners feel comfortable accepting American Express, which gives you an advantage when shopping, eating and sleeping in foreign countries.

If you have a card like the Hilton HHonors Platinum Credit Card from American Express, you can also earn reward points for free hotel stays, free airline tickets and discounts on travel vacation packages. The JetBlue and Blue Sky cards have similar advantages.

Cashing Checks

If you have an American Express Credit Card, your overseas banking will be made much easier. Most American Express financial centers will cash personal checks of up to $1,000 for regular card holders, and up to $5,000 for gold card members. They can also provide simple, fast currency exchanges and money transfers.

While it is always a good idea to have your bank information with you wherever you travel, having an American Express credit card acts like an extension of your personal bank. Running out of cash in a foreign country is terrifying, and something to avoid wherever possible. If you have your American Express credit card, you can receive cash advances and money transfers at financial centers.

Flights & Rental Cars

Business travel is one of the most stressful aspects of a professional’s career, and if travel is a large part of your career, then an American Express credit card can cut anxiety to a minimum. If you use the same card for your flights and rental cars as with other purchases in foreign countries, you have much less paperwork to sort through when it comes time to file expense reports. Using American Express can also make delayed and canceled flights less of a problem. When your flight is canceled, the airline can simply refund your money directly to the card, rather than forcing you to wait weeks or even months for a check to come in the mail.

American Express also offers airline reward cards, such as the Gold Delta SkyMiles credit card. International travel earns the maximum number of bonus miles for future flights, and unlike other airline reward cards, your SkyMiles never expire. When you book a flight using the SkyMiles card, you never have to worry about blackout dates, which can be a wonderful bonus for frequent international travelers.

Business Credit Cards

American Express offers a variety of business credit cards, ranging from those fit for small businesses to cards that benefit large corporations. Foreign countries are just as respectful of business cards as with personal cards, and in many cases, the benefits are even better. If your business or the company that employs you requires consistent travel, there may be more rewards available than when each employee uses his or her own credit card. For example, the Platinum Business FreedomPass Credit Card from American Express, each card earns points toward rewards, including free travel and accommodations. So if twelve employees have copies of the FreedomPass Credit Card, the business is rewarded twelve times over.

Having a business credit card from American Express can also make employees much more comfortable with International travel. Rather than charging expenses to their own account and filing an expense report later, the company is billed directly, allowing employees to feel safe. American Express is not the only credit card company to offer travel and cash rewards, but it is the only one that is accepted by almost every overseas vendor. While international travelers will find that some businesses require cash, there is always a place to retrieve money when funds run low, and travelers can feel comfortable knowing that their finances are secure.

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