Your Credit Card Bill - The Day After Christmas

You can always expect to face a few challenges the day after Christmas. These can range from traffic jams as you return from a family visit to the challenge of waking up in the morning and returning back to the office. All of these will last a day or so. A challenge, not as temporary, is paying off the month’s credit card bill. Now those extravagant gifts aren’t looking so smart, are they?

The Associated Press reports that Americans are falling behind on making credit card payments "at an alarming rate, sending delinquencies and defaults surging by double-digit percentages in the last year and prompting warnings of worse to come." An increasing number of credit card users are in debt and are more than 90 days late in paying off outstanding balances. Credit card delinquencies are up 26 percent over a year ago, reports the news wire service. All we can deduce from this increase is that Americans aren't afraid of high-interest debt.

So if you are looking to make the transition from the “spenders” category to the “savers”, may we suggest you skip the numerous after-Christmas sales this year?

What Does My Credit Score Mean?

Bad Credit

Bad credit is a negative rating given from the credit reporting agency usually associated with anyone whose credit score of 669 points or lower. Skipping payments for an extended period of time is the leading cause of bad credit. Whether non-payment is willful or due to financial problems, it can still result in a negative rating. However, lenders are more willing to work with individuals who contact them to inform them that they are having issues meeting their payment deadlines.

What Causes Bad Credit

• Making late payment of balance frequently


• Skipping payments frequently


• Exceeding card limits


• Declaring bankruptcy


• Having no credit

Bad credit can make it very difficult for someone to take out a student, auto or home loan, secure an apartment, or participate in any number of lending programs. It can be very difficult for someone with bad credit to increase their credit rating because most credit card companies are hesitant to issue a credit card to someone with bad credit or no credit. Applying for a loan becomes a much more detailed and lengthy process, because someone with a credit score that is low is considered a “credit risk”.

Fair Credit

Fair credit is a neutral credit rating issued to anyone with a credit score of 670-699. A fair credit rating shows credit card companies and money lenders that you do a fairly decent job of making you payments on time but still occasionally have issues. If you have fair credit, a lender may require additional documentation before a loan will be approved.

What Causes Fair Credit

• Occasionally making late payments of balance


• Occasionally skipping payments


• Having very little credit history

People with fair credit may have difficulty being approved for a credit card by some companies. Not all credit card companies or money lenders will reject an application from someone with fair credit, but difficulty may arise from trying to obtain a loan or credit card with a lower interest rate.

Good Credit

A good credit rating is applied to someone who has a credit rating of 700-729. People with good credit usually have no problem being approved for credit cards and loans with low interest rates.

What Leads to Good Credit

• Making payments on time and in full


• Having a fairly lengthy credit history


• Disputing unfavorable inaccuracies in your credit report

People who have good credit are able to borrow more money, with more ease, at lower interest rates. Many potential employers may also look at your credit rating and history to judge your level of dependability. Having a good credit history may also help you gain employment in some situations.

Excellent Credit

People with excellent credit usually have a credit rating of 730 or higher. People with excellent credit tend to make big purchases and/or loans and pay them back in full and as promptly as possible. Several years of this type of behavior can lead to an excellent credit rating. Credit card companies and banks see you as a responsible person and consider you not to be a credit risk. People with excellent credit have the ability to obtain credit cards and loans at the lowest possible interest rates.

What Leads to Excellent Credit

• Making large credit card purchases and paying them in full and on time


• Having several credit cards with a “zero” balance at the end of each month


• Disputing unfavorable inaccuracies in your credit report


• Never having late or short credit payments

Having excellent credit can take years to achieve. Once you have achieved an excellent credit rating you may become eligible for deals and rates not available to others with lesser ratings.

To learn more about credit and find the credit cards you are eligible for, please visit Credit Card Detials.