• Jennifer

Fast and easy cash is the name of the credit card companies’ game, and credit card loans are no different. But behind the advertising and allure of quick cash, are they really the best option for consumers?

Credit cards may just be up there as one of the greatest inventions of all time for many people; there are few of us who can resist flashing that plastic. Suddenly, nothing is beyond your purchasing power – and even emergency and surprise expenses are easy to deal with, rather than a huge headache.

Beyond this easy consumerism, however, credit card companies are only too aware of the American weakness for credit. Now, they’re offering loans that are very easy to get – but before you jump on these loans, you might just want to ask yourself whether they are too good to be true.

On the face of it, they seem like a great option: the more kinds of credit you have, the better your credit scores could potentially be – and surely a credit card loan is just one of those many forms?

Not quite.

Credit Card Loans Might Be Fast – But They Offer Few Benefits

These loans – sometimes called “flexible financing” are not recorded as loan payments, but rather credit card payments. In other words, these won’t contribute to your credit rating at all, giving you no benefit on that front.

It’s also worth knowing that unlike credit cards themselves, the loans don’t come with any of the bonuses that make credit cards so attractive. There are no cash back initiatives, no air miles, and no points. Yet despite having fewer benefits, you still have all the responsibilities of a credit card – which means remembering your limits and staying under them… or paying the eye-watering fees.

As great as these loans might look on the face of it, they offer few benefits and can even impact on your credit score in the future. If you want to take out a loan, you should think carefully and look at your options.

Are There Better Alternatives to Credit Card Loans Out There?

Whenever you’re considering taking out a loan, it’s worth looking at all the options you have – here are two of the most popular in the United States today:

Personal Loans

Personal loans are what most people typically take out when they need extra money. These generally offer lower interest rates and are an attractive option for people with a high credit score since they can give you a boost – especially if you take out multiple personal loans and pay them off on time.

0% APR Credit Cards

Interest-free credit cards are essentially a loan without interest, which can save you hundreds of dollars. What’s more, unlike credit card loans, you’ll also enjoy the bonuses that come with your credit card, such as air miles. However, you will need to keep an eye on your balance as well as read the small print.

Credit card loans might be the talk of the town right now, but don’t let the glossy ads fool you. The reality is that they simply aren’t the best option for many people, and don’t offer the flexibility or rewards that you can get elsewhere.

With the negatives outweighing the “easy cash” positives, it seems that for now, most will be better of going through more traditional routes to get the loan they need.

37 views0 comments

A high credit score opens a lot of doors in the United States, especially if you’re looking for a loan. If you’ve had a financial setback that resulted in a lowered credit score, here’s the lowdown on how to get your score back up to where you want it to be.

It’s as American as Apple pie, a dish we all love – but most Americans, at best, enjoy a love-hate relationship with their credit score. It’s just a number, but one that can have a huge impact on your overall financial health and purchasing power. Just like everything is bigger in Texas, everything is better when your credit score is higher.

However hard you try to keep your credit score flying high, life sometimes takes a wrong turn, leading to setbacks. Something as simple as a missed or forgotten payment can quickly leave you in trouble and damage your credit score in what feels like seconds – and regaining those points or even getting them higher can feel like pulling a tooth out.

Are there ways you can quickly improve your credit score – or is it a hopeless quest? As it turns out, there are some things you can do to get your credit score back on track.

Consider the Reasons Your Credit Score Dropped

First things first: why did your credit score drop in the first place? A single missed payment will hurt for a short while, but multiple missed payments over a period will build up and hit harder. The size of your debt also affects your score; a late mortgage can impact your credit score for a whole year.

Bankruptcy is very damaging, with the potential to land you in the doghouse for as long as a decade.

Look Back Over Your Credit History

As stock market watchers know, past performance is no guarantee of future results, but it does provide a bigger picture. If your historic credit scores are great, then it will be hard to improve on them – after all, you’re already topping out. Conversely, a low credit score reveals poor financial management, and it is hard to make it worse.

Ironically, this means people with great credit scores and an overall clean record get hit harder by mistakes, even though they otherwise do everything right.

Analyze the Reasons Your Credit Score Dropped

Paying your bills on time is one of the most common – and effective – ways to boost your credit score, with improvements typically shown in six months. If you really want to fight back, you can also check your credit report and dispute errors. Got a balance on a credit card? Pay it off and reduce your credit card utilization ratio to get a sweet boost.

If you have a trusted friend willing to help you out, you can also ask them to let you be an authorized user on their card. This only works if they have good financial habits themselves, so choose wisely.

When it comes to maintaining a healthy and high credit score, prevention is better than cure. For most of us, that means keeping a close eye on your bills and credit cards and sticking to a monthly budget. While it’s OK to treat yourself from time to time, be wary of the true cost of your purchase and avoid buying non-essentials that you cannot truly afford. In time, your score will increase, and you’ll enjoy a much better financial outlook with all the choices that come with it.

20 views0 comments
  • Jennifer

This story first appeared on Sweet Startups.

David Hernandez is the Client Manager for Pacific Collection Group. The Group is a debt collection agency serving businesses and individuals that need to have their investments recouped. The Group serves a broad range of clients and takes care of each one with excellent customer service. In addition to taking care of its clients, the Group has a mission to treat debtors with politeness and respect. This does not mean that they cannot be firm when it is required, but they believe that it is more likely that a debt will be collected if the debtor is approached like a human being.

Hernandez has a background in real estate, but he wanted to do something different with his life. He soon entered the field of debt collection and found out that his skill set meshed perfectly with his job. He is involved with the Group’s proprietary debt collection software and uses it to help his clients get their money back.

Hernandez believes that it is crucial for all employees of debt collection agencies to be well-versed in the law so that costly missteps are not made. With attention to detail and the legalities of the business, Pacific Collection Group will continue to succeed.

How did you get involved in the industry?

I started out in real estate, but I soon decided that it wasn’t right for me as a career. I went looking for new job opportunities that would use my financial expertise. One of my friends from college told me that he had gotten into debt collection and he suggested that I might enjoy the work. Soon after, I applied to my current job and was accepted.

Did you ever doubt your business idea?

Of course, we had some misgivings when we started out. There were already several other debt collection companies in our area, and we feared that the market might be saturated. We were able to win ourselves a significant client base in the first few years of our business, which means that we could compete effectively with other agencies in our area. That put our fears to rest.

Did you have a mentor?

I do have a mentor. She worked at our agency longer than I have, and she showed me the ropes of taking care of clients. She has since retired, but we continue to have lunch and coffee every so often. I value her opinion about the work I have been doing, and she continues to be a big help. I hope that I can mentor a less-experienced colleague myself. I feel that I would get a lot out of that interaction.

Do you have any regrets about your career choices?

No, I don’t have any regrets. I get a great deal of satisfaction out of recovering our clients’ money. I believe it is a simple principle of fairness that people who take services or products need to pay for them. If they can’t afford them, they shouldn’t get them in the first place. Sadly, many businesses and individuals have not absorbed this lesson.

Which business leaders do you admire most?

Henry Ford is inspiring. He was able to create an entire industry through his introduction of the Model T. His designs for the modern assembly line made a huge impact on businesses everywhere.

What does the future hold for your company?

I hope that our company will continue to serve many clients and recoup their investments. We are looking into expanding our services, and I hope that we are able to increase our reach in the business community. We will need to hire some more people to do so, but I believe we have a strong plan in place to do so.

What is the most important aspect of your brand?

The most important aspect of the brand is that Pacific Collection Group provides its services with a human touch. We believe in treating debtors with respect, which isn’t often done in our industry. We believe that approaching a debtor as a human being, rather than as a simple source of money, makes a big difference in how we run our business.

What motivates you?

I am a strongly self-motivated person. The satisfaction of getting a client’s money back motivates me. I view each client interaction as a challenge, and when I am successful, I feel like I have won. It’s a great way to approach business. I am also motivated by caring for my family.

How do you unwind?

I unwind by running, listening to music, and watching movies. Running is a way for me to work off my negative feelings while making my body stronger and better able to meet the challenges of every day. It also lets me think and gets me outdoors, which is important when you work in an office setting.

Do you have any advice for our readers?

I would advise your readers to look outside the box when it comes to applying for jobs. You may not have the exact background that the employer is looking for, but your personal skills can impress an employer. I didn’t have any experience in debt collection when I started with our company, but I was able to adapt quickly.

12 views0 comments