Specialized Consumer Solutions - Reasons to Avoid Store Credit Cards

One of the biggest pieces of advice that Specialized Consumer Solutions gives to people looking to improve their credit is to avoid store credit cards. Many popular retail stores, like Target, Best Buy, Nordstrom, and many more offer a store credit card with perks like a sign-up discount, high amounts of store reward points, and more. At first, these perks seem very enticing, and you may be tempted to open a card at your favorite store. However, this is a very easy way to hurt your credit.

The biggest reason not to open a store credit card is that the interest rates on them are usually extremely high. It is common for store credit cards to have interest rates ranging from 15 to 25 percent APR. Usually this is how they compensate for the original discount you received when you signed up for the card, so they still profit off of your credit purchases, even though it seems like a good deal. Also, while other types of credit cards usually offer an initial period before interest starts being charged, store credit cards will often charge you interest on your very first purchase, so you end up spending more money than you realize.

The only way to manage having a store credit card without hurting your credit or paying large amount of interest charges is to pay off the entire balance immediately. However, this is not realistic for many people. Therefore, Specialized Consumer Solutions highly recommends that you avoid store credit cards in order to save your money – and your credit score.

Specialized Consumer Strategies - How to Deal with Collection Accounts

In helping clients become better managers of their finances, Specialized Consumer Strategies comes across various situations that require the right knowledge to navigate. One of these is collection accounts. Collection accounts are those that have fallen so far behind that the creditor writes them off as bad debt, and probably assigned or sold them to a collection agency. For credit card debt, an account can be assigned or sold after a set period, for example, 180 days.

The agreements between the collection agencies and creditors are varied, but when debt is sold, the collection agency pays the creditor a percentage of the face value and can keep the full amount (if it’s able to collect). Where debt is assigned, the creditor agrees to give the agency a commission or flat fee for collection.

While federal laws lay out what collection agencies can or can’t do, Specialized Consumer Strategies encourages clients to familiarize themselves with the laws.

When debt collectors come calling
Debt collectors work fast, and they generally have better collection rates on recent defaulters than old ones. If your account goes into collection, expect the phone to ring off the hook. The collection agency will try to contact you through every possible means.

You should know some debts are negotiable. This mainly depends on whether the debt has been assigned or sold to the agency. A debt collector handling an assigned debt will stay on the creditor’s leash. Debt collectors that handle sold debts might have room to reach a settlement.

Specialized Consumer Strategies - Make Wise Financial Decisions Everyday

In addition to helping clients understand how to eliminate debt from their lives, Specialized Consumer Strategies also works to ensure they can make wise financial decisions. Life is filled with choices, and making wise financial decisions ensures clients can accomplish their short and long term financial goals.

Wise financial decisions are the foundation of a good relationship with money. Every day, you’re likely faced with many decisions, some of which have financial effects. Your ability to make good decisions determines whether you enjoy the financial success you desire.

Here are some decision-making techniques you can apply:

Make financial decisions early

It’s easy to think of your willpower as a container of energy that’s full every morning. As the day carries on, you are likely making small decisions. With every decision, your willpower continues to decrease, until you have little left at the end of the day. Mentally, you are more worn out by then, which makes it important to make the important ones at the beginning. If a decision has financial implications, make it early in the day when your mind is fresh and can think things through.

Change your routine

Many individuals’ daily routines are filled with temptations. You drive by a fast-food store or coffee shop and you’re tempted to get something to eat. If gadgets are your thing, passing by the computer shop on your way to the office probably gets your heart racing.

To avoid entertaining the thought of making an impulse purchase, change your routine.

Specialized Consumer Strategies - Understand the Different Types of Credit

Specialized Consumer Strategies is a financial consulting firm that helps individuals understand how to approach credit and debt. Turning to credit for financial support is normal in many people’s lives. Credit takes many forms, and it allows you to purchase now and pay back later. With this in mind, it’s important to understand the various forms of credit and learn to manage it wisely.

Revolving credit
Revolving credit allows you to make different payments regularly. Often, these payments are dependent on how much you’ve used in a particular period, like a month. The payments made are subject to a set minimum payment, and you have the option to defer payments forward to the next month (which means more interest charges for the extra time). A common example of revolving credit is a credit card.

Installment loans
An installment loan requires you to make a fixed payment each month until you have settled the principal amount. The amount borrowed is paid back over a period of time, and interest is charged. Business loans, mortgage loans, and student loans are some examples of installment loans in the market.

Secured credit
Secured loans are tied to an asset, such as your house or vehicle. This form of credit is considered safe by lenders because if you default on payment, the lender can repossess the asset to cover the borrowed amount.

Specialized Consumer Strategies provides clients with information on how credit can benefit their lives and businesses.

Specialized Consumer Strategies - The Importance of Financial Planning

Specialized Consumer Strategies works with clients who wish to gain knowledge on how to achieve financial control. Many of the firm’s clients are people struggling with bad debt. SCS comes in and provides the knowledge and tools necessary to help clients eliminate debt and become wiser at financial planning.

Having a financial plan enables you to set short and long term financial goals, which is very important in achieving financial success. When you have a plan in place, it’s easier to make decisions that help you stay on track. Some people can do this on their own. As Specialized Consumer Strategies has seen over the years, however, many people require a little help in securing their financial futures.

When you have a plan, you can manage your income effectively. You can understand how to allocate the income to various needs and still have enough left for savings. A financial plan enables you to see the areas that require less spending, so that you are left with more of your hard earned money. With an increase in cash, you can start considering investments that can multiply your financial resources.

A good financial plan also considers your financial objectives and risk appetite. Once you start considering various ways to save and invest, the financial plan helps you make the right decisions on which investment options to consider.

Lastly, a financial plan is what you require to provide financial security to your family. If you haven’t worked on a financial plan yet, Specialized Consumer Strategies knows it’s never too late to start.

Specialized Consumer Strategies - Three Ways Credit Cards Should Not Be Used

Specialized Consumer Strategies works with individuals who have poor credit score and are in debt. They offer strategy options that clients can choose to pursue to apply for smaller interest rates, work of their debt, and increase their credit scores. Clients can also ask for a budget plan that helps them live within their income.

Specialized Consumer Strategies focuses on not only providing their clients with options but also educating them so that they can make better decisions in the future. They put on emphasis on how to properly utilize credit cards. Here are three ways credit cards should not be used.

Credit cards should not be used to receive store discounts. Often, stores offer one-time discounts open opening a new line of credit. In the short term those discounts seem beneficial, however, store credit cards have negative impacts on credit scores and will be harmful in the future.

Credit cards should not be used to finance personal wants. When credit cards are used in this manner, the balances on the cards are often ignored or reach a point where payments fall behind. This is dangerous because payments need to be made, otherwise the credit supplier will eventually report that individual to the credit bureau.

Credit cards should not be used as a substitute to close old accounts. It is good to keep old accounts open because they show a history of credit card use and payments, which looks good on credit reports. The length of a person’s credit history makes up 15% of their overall score according to FICO.

Specialized Consumer Strategies - Three Ways Store Credit Cards Affect Credit Reports

Specialized Consumer Strategies provides financial options and budget plans to their clients who are in debt and have bad credit. They were established eight years ago in response to banks and lenders increasing their interest rate charges, regardless of a person’s individual financial situation.

Specialized Consumer Strategies strongly advises their clients to avoid using and even applying for store credit cards because of the negative ramifications they can have on credit reports. While store credit reports seem like a good deal at the team, in the long run, they have bad effects on a person's finances. Here are three ways that store credit cards affect credit reports.

• Using a store credit card responsibly will help a person's credit score, but that do not significantly help scores and are no way near as effective as regular credit cards are. Additionally, it is difficult to use a store credit card responsibly because they are easily forgotten about and, therefore, the balance is disregarded.
• Store credit cards usually carry grossly large interest rates, way above the already high market rate for credit cards. If a balance is carried on a store credit card, the charges will be astronomical and can become difficult to pay off. If a balance is not properly paid off, the cardholder will be reported to credit bureaus, thus affecting that person’s credit score.
• Lastly, store credit cards usually have low credit limits. This makes it easy for cardholders to max out their cards, which means that penalty fees and late fees start to rack up. This puts the cardholder in a difficult financial situation and could lead them to miss payments, thus affecting their credit score.