For most clients, Credit Management is a key part of planning which allows you to trade future income for current spending. Easy credit has been increasing over time though periods of tight credit such as during the recent downturn and bounce back can cause hardships.
Credit is handy for shopping and allows you to deal promptly with money problems without draining your assets. The downside is it ties up future income and creates a reason to overspend. Its cost is in higher payments and annual fees. When used wisely, Credit Management improves your planning process.
Credit Planning
SCM ensures you use it appropriately in achieving overall your goals due to leveraging. First, we reviews your current debt structure and check its strengths. Then, we project borrowing needs and help you to form a bond with a bank officer. SCM is familiar with a wide range of sources and guides you to the right one. Finally, we encourage debt limits and helps you cope with problems.
Getting Credit
A sound credit record and judicious use of borrowing form a firm foundation for credit management. Basic types, secured and unsecured, have terms to be evaluated including overdraft protection. In addition to bank loans, other types include life insurance policy loans, family members, retirement plan loans and margin loans. The tax aspects are noted, credit reports reviewed and sources shopped.
Credit Cards
Credit cards are a way of life in America and provide an good way to manage your daily expenses without holding extra amount of cash. There are bank cards such as Visa and Master Card, retail cards issued by stores, oil firms and rental car agencies, travel cards and debit cards which replace check-writing. Also, they have annual fees and finance charges which are reviewed. Additionally, fraud needs to be guarded against and plans made for lost or stolen cards.
Auto Loans
The price of cars has been rising compared to incomes and good use of this asset is key. A major decision revolves around using loans or leasing. With loans, the total finance cost should be figured along with the cost or APR, the down payment should be specified and monthly due date optimized. Loans without prepayment penalties should be sought.
Home Loans
This part of your financial plan involves using an owned home in place and not real estate investments. A line of credit is available and a reverse mortgage is OK in some instances. Refinancing offers opportunities for strengthening your capital structure and involves reworking existing mortgages, second mortgages and home-equity secured credit. Despite their attractiveness, home loans should be used for productive uses only.
Managing Problems
Too much credit has hurt many families. Warning signs include credit balances rising ,, payments always late, continually lengthening repayment periods using cash advances to pay basic monthly bills and cannot name all creditors. SCM helps you discover the degree of the problem and nudges you back on a safe path, even if it means going to a debt counselor.
For other Financial Planning topics, visit our Financial Planning page.
