The credit crisis has completely changed the credit landscape. You'll have to handle credit much differently in 2009 than you did in 2008, starting with paying more attention to inserts in your credit card billing statement. Here's a list of 10 credit moves you must make in 2009. Your good credit depends on it.
1. Read your billing inserts.
Credit card companies have been hiking interest rates and slashing credit limits left to right. They typically notify cardholders about credit card changes through billing statement inserts, which most people throw away. Pay attention to anything that comes in the envelope with your billing statement so you know what changes are in store for your credit card.2. Don't carry a balance.
Not only is carrying a credit card balance expensive, it's also risky. As credit card issuers respond to the credit crisis, increased interest rates and reduced credit limits impact the cost of your credit card and your credit score. Keeping a $0 lowers the impact of changes made to your credit card agreement.Credit card issuers sometimes close inactive credit card accounts to keep their own debts low. That means your credit card could be closed if you don't use it. Some credit cards you don't want to be closed - like your oldest one - so use your credit cards every once in awhile to keep them open.
Sudden interest rate increases probably make you want to sever ties with your credit card issuer. Before you send your opt-out letter, make sure opting-out won't hurt your credit score. In some cases it will.
Lenders and creditors have tightened their lending requirements making it harder for you to get a credit card or low. Check your credit score before putting in new applications to see where you stand. These days it takes a score of at least 720 to get the best interest rates and, in some cases, to even be approved at all.
An emergency fund of three to six months of living expenses should be a part of your finances. Under current job conditions, it's a must have. Many companies are laying off employees at all levels, so it helps to have some financial insurance in case your company becomes one of them. A sizable emergency fund will supplement any unemployment benefits you receive and help bridge the gap in your income.
Sure, late payments have always been bad. In an economy that's sensitive to even the slightest bump, a single late payment could make it nearly impossible for you to get a loan. Lenders won't to be absolutely certain you won't miss their loan payments. The way to prove you won't is to pay your other lenders on time.
The credit crisis won't last always. When it's over, have your credit in good shape so if you need to apply for a mortgage or auto loan, you can do it with ease.
9. Only take out the loans you need.
The more money you borrow, the more you have to pay back. Adding another loan to your monthly expenses puts too much pressure on a budget that's already stretched. You also want to keep your debt as low as possible while the job economy is so risky. One less loan will make it easier to make ends meet in an unfortunate job loss.Prices steadily increased in 2008, but wages didn't increase at the same rate. Paychecks got tight and families got desperate. When you notice you're having trouble making ends meet, it's time to take out your budget and make some changes. Pay attention to what you're spending money on and cut back as much as you can. Avoid taking out expensive payday loans, especially when you're already having financial diffculty. You'll have a hard time paying the loan back and will end up owing a lot more than you borrowed.
