We’ve all heard about the dangers of credit cards. We all know someone (or are someone) who has gotten in debt a little too deep because of them.  Most debt counselor’s advice is to simply quit using them or cut them up and pay off the balance. Then when you’re out of debt, and can use credit responsibly, you can have your cards back. But my question is; when is it responsible to use credit? Most financial advisors, both Christian and non-Christian seem to agree that credit is a tool and when used responsibly it can help to increase your net worth. But that doesn’t seem to be working for most people. In fact, I think it’s clear that credit has financially bankrupted more people than it has helped.

I think that one of the major problems is that unlike other tools that we use, most people are not taught how to use credit wisely. Sure parents tell their children to beware the dangers of credit cards and warn them about instant gratification but they never teach them what situations it is ok to use credit in. There are plenty of thumb rules that attempt to answer this questions such as, “only use credit cards in an emergency”, or “credit is only ok to use if you’re buying something that will increase in value”. Unfortunately, these are only thumb rules, and pretty unstable at that. What constitutes an emergency? Does someone have to be at risk of losing a limb or is it ok to use financing if the sale on the TV that you really wanted is going to end soon. And how do you know if what you’re buying is going to increase in value? Over the last year we saw foreclosures across the country and people walking away from their houses because they owed more than the house was worth. Were their mortgages a good use of credit?

We see credit or debt discussed several times in the bible. But what we as Christians often forget, is that there are two sides to credit. There is a borrower, and a lender. Our lifestyles and roles as consumers have trained us to be borrowers without reminding us what a blessing it is to be a lender. I don’t mean to be a lender for profit, the way the banks and credit card companies do. But to be a lender to someone in need. Remember that God told Israel that he would bless them and make them lenders to many nations and borrowers from none (Deuteronomy 15:6). How can we reach out to those in need if everything we own is already owned by someone else? The purpose of credit is not to allow us to purchase what we want or when we want it. For Christians, the purpose of credit is to serve as a way to help others. We should be the lenders, not the borrowers. God desires us trust him for our needs and to be lenders or even givers to others in need (Matt 5:42; 6:31-32).

So, I would say that “yes”, credit is a tool. But not a tool like a hammer with which you may bruise your finger if you make a mistake. But more like a chainsaw, in the sense that if you use it incorrectly you may never recover. The sad part is, most people are holding it on the wrong end and will end up hurting themselves.

Supporting Verses about Debt

Others were saying, “We are mortgaging our fields, our vineyards and our homes to get grain during the famine.” Still others were saying, “We have had to borrow Money to pay the king’s tax on our fields and vineyards… We have to subject our sons and daughters to slavery. Some of our daughters have already been enslaved, but we are powerless, because our fields and our vineyards belong to others.”

- Nehemiah 5:3-5

A man lacking in judgment strikes hands in pledge and puts up security for his neighbor.

-Proverbs 17:18

Give to the one who asks you, and do not turn away from the one who wants to borrow from you.

-Matthew 5:42

Do not be a man who strikes hands in pledge or puts up security for debts;

If you lack the means to pay, your very bed will be snatched from under you.

-Proverbs 22:26-27

The wicked borrow and do not repay, but the righteous give generously;

-Psalms 37:21

The rich rule over the poor, and the borrower is servant to the lender.

-Proverbs 22:7

Let no debt remain outstanding, except the continuing debt to love one another, for he who loves his fellowman has fulfilled the law.

-Romans 13:8

As stewards, we ultimately answer only to our master. It does not matter what the world or even what other Christians think of our stewardship. Our goal should be to be welcomed into the joy of our master as a good and faithful servant. To hear the words “Well done”. Not “well thought” or “well believed” but “well done”. Every decision that we make should be based on its effect on this one final result.

C.S. Lewis says this brilliantly in his essay “The Worlds Last Night”

We have all encountered judgments or verdicts on ourselves in this life. Every now and then we discover what our fellow creatures really think of us. I don’t of course mean what they tell us to our faces: that we usually have to discount. I am thinking of what we sometimes overhear by accident or of the opinions about us which our neighbors or employees or subordinates unknowingly reveal in their actions: and of the terrible, or lovely, judgments artlessly betrayed by children or even animals. Such discoveries can be the bitterest or sweetest experiences we have. But of course both the bitter and the sweet are limited by our doubt as to the wisdom of those who judge. We always hope that those who so clearly think us cowards or bullies are ignorant and malicious: we always fear that those who trust us or admire us are misled by partiality. I suppose the experience of the Final Judgment (which may break in upon us and any moment) will be like these little experiences, but magnified to the Nth.

For it will be infallible judgment. If it is favorable we shall  have no fear, if unfavorable, no hope, that it is wrong. We shall not only believe, we shall know, know beyond doubt in every fibre of our appalled or delighted being, that as the Judge has said, so we are: neither more nor less nor other. We shall perhaps even realize that in some dim fashion we could have known it all along. We shall know and all creation will know too: our ancestors, our parents, our wives or husbands, our children. The unanswerable and (by then) self-evident truth about each will be known to all…

We can perhaps, train ourselves to ask more and more often how the thing which we are saying or doing (or failing to do) at each  moment will look whan the irresistible light streams in upon it’ that light which is so different from the light of this world- and yet, even now we know just enough of it to take it into account. Women sometimes have the problem of trying to judge by artificial light how a dress will look by daylight. That is very like the problem of all of us: to dress our souls not for the electric lights of the presents world but for the daylight of the next. The good dress is the one that will face that light. For that light will last longer.

Watch any financial channel on television long enough and you will be bombarded with so many contradictory investment opinions that it will make your head spin. Do you ever wonder why so many educated and experienced investment professionals can use the same information to come to completely different conclusions? While it may seem like someone has to be off their rocker for people to disagree so drastically, what you may not realize is that each of those professionals subscribe to a different investment theory which radically alters their perspectives on the market.  These theories serve as a starting point and a guide while financial professionals analyze the value of a stock, and as you’ve seen they can lead them to very different opinions.

There are three major investment theories that investors tend to subscribe to. Notice that I didn’t say professional investors, most personal investors can trace their beliefs about the market back to one of these theories as well. See if you can tell which ones describes your approach to investing.

Investment Theories

(Note: These theories are used by investors to determine the true value of stock. While some of them also have management styles based upon those beliefs, the purpose of this article is mainly to inform you of the assumptions made in each theory, not to teach the management style.)

Fundamental Analysis- Those who subscribe to this theory believe that the true value of a stock is determined by the company’s future earnings. They use fundamentals (or fundies) to attempt to determine if the companies expected earnings are higher than the company’s current earnings. If so, the price of the stock should go up. Several factors are taken into account including (1) the financial strength of the company, (2)the industry the company is in, (3)the board of directors/who is running the company, (4)new-product development, and (5) the overall economic growth of the economy.

This is probably the most popular approach to investing and because of this, an entire arsenal of tools have been created to help investors to choose stocks without having to do the dirty work of calculating statistics and researching company history. If you use a stock picking tool and you’re not sure what principals it uses to find the best buys and sells, chances are it was designed with this theory heavily in mind. A major pro of this method is the intimacy that proponents have with the companies they invest in.  If a fundamental analyst does his own research then chances are he knows the ins and outs of every company that he’s invested in and can defend his logic to the end. The cons are that no matter how well he knows the company, the stock market price is still set by the public who most likely doesn’t know the ins and outs of the company and won’t always take that into account when buying shares. Another Con is the fact that so many programs have emerged based on this theory that many professional and private investors are not doing their own research and simply trust what their software tells them.

Technical Analysis – This theory is based on the assumption that the market value of a stock is determined by supply and demand in the market. Subscribers to this theory believe that all the information needed to calculate the real value of a stock is found in the market as a whole and not in the expected earnings or the intrinsic value of the corporation’s stock. Technical factors evaluated include the total number of shares traded, the number of sell orders, and the number of buy orders over a period of time. Technical analysts construct charts which plot past price movements and allow them to observe trends and patters in the market as a whole as well as in a company’s stock.

This method is famous for the elaborate charts used. If your investor’s office or his computer screen is covered with charts with hundreds of x’s and o’s forming a graph, then he is utilizing this theory. Other charts include candlestick graphs, Bollinger bands and Fibonacci charts. Opponents of this theory (or proponents of other theories) claim that technical analysts aren’t truly analyzing anything but are trying to predict the future while proponents of technical analysis can back their beliefs with some impressive results. Pros include the fact the technical analysts usually end up doing their own research even though most of them don’t make their own charts (there are plenty of online sources for these). Most techies are also very familiar with market history, overall buy/sell patterns, and major movements in the market. The cons are that technical analysis can sometimes be presented as a hard science when the fact is; patterns can change without notice and as any professional investor can tell you “past performance is not a guarantee of future returns”.

Efficient Market Theory – This theory is sometimes referred to as the random walk theory. This theory states that buyers and sellers in the market always consider all the information available before buying a stock and therefore the market is completely efficient. Because of this, buys and sells are determined by an individual based solely on his assumptions of what others will do. If he believes that others will buy a stock causing the price to rise, he tries to beat them to it and ride the wave up just to try to beat them to the sell. Any news or tax law that might affect a stock’s price is quickly absorbed by investors trying to seek a profit. Thus, the true value of a stock is determined by its market value.

Efficient Market Theory proponents basically believe that movements in the market are based on chance. You will win some and you will lose some and none of it is due to market patterns, company strength, or any predictable pattern. A popular belief that tends to follow this theory is that it is impossible to beat the market over the long run. Like flipping a coin, you eventually end up with the same number of heads and tails. You might as well just buy and hold because you are just as likely to lose your money as you are to make more. It is important to note that this is the only theory that holds to this belief. Both technical and fundamental analysts believe that a well trained and educated investor will be more profitable then someone who is just guessing. You may come across articles that show that a private investor just randomly picking stocks can do as well as a professional money manager using whatever system he subscribes to. This is a prime example of belief in and efficient market. The pros of this theory are that in the long run, the market does tend to go up in value so if you’re right and you break even with the market, then chances are you will ultimately come out ahead. The cons are that subscribing to this theory will most likely cause you not to seek out a professional advisor (because why pay someone for something you can do yourself) and if you’re wrong, you will end up missing out on higher returns or even losing what you started with due to lack of information.

Evaluation

So which theory is correct? Personally, I subscribe to all three. While I do believe that there is an unpredictable aspect to the market, I also believe that the strength of the company and the market’s past performance play a part in getting people to invest in a company and therefore affecting its stock price.

Think of an investment like a car that you’re test driving. The fundamentals are the structure and integrity of the car. They let you know what the car is made of, if there is any rust, what kind of engine it has and if all the systems are in place for the car to run well. But that doesn’t tell you everything you need to know. The technicals are the gauges and warning lights on the dashboard. While driving, it’s a good idea to keep an eye on them to make sure the car is responding as expected and that conditions aren’t approaching that would damage the car. If a check engine light comes on but all other lights and gauges are reading normal, chances are that you will keep driving but will keep a closer eye on your dashboard for anything else that indicates a problem. However, if your check engine light comes on, your engine temperature starts reading high and you lose oil pressure, chances are you will immediately pull over and get out of the car. It doesn’t matter how well the car was made or how it was expected to perform, the fact is that all other indications are showing that the car is not a good buy. Now think of the randomness of the market like the wind. You don’t know when it’s coming, what direction it’s coming from, or how hard. It also doesn’t affect the structure or systems of the car but it does affect how it handles, (just like the random market conditions don’t affect the structure of a company or the past market patterns but it can affect future gains and losses in a portfolio). A new driver may be surprised and not know how to interpret even a slight breeze and may have to pull over and get out of the car while a seasoned driver could probably drive through a wind storm without ever leaving his lane.

So to answer the question,” which theory is correct”? Well, all of them and none of them. If any of them were right all the time wouldn’t everyone just flock to it and let the others die out? And if they were always wrong the probably wouldn’t have lasted long enough for us to talk about. The fact is that proponents of all three theories can strongly defend their strategies because all of them tend to be right at one time or another. It can be extremely hard to track which one is more accurate because successes and failures can vary even among investors that subscribe to the same theory.

In Conclusion

If you like to do your own investing then I would recommend reading up on these theories and how they relate to the market. Even if you don’t agree with one or two of them it’s wise to learn about them just so you don’t end up pushing aside some valuable insights that you may not find anywhere else. If nothing else, knowing a little about each theory may help you to identify the financial crackpots on television.

If you prefer to let a professional handle your accounts, I would advise talking to him about which theories that he subscribes to and give him a chance to defend his point of view. Remember, nothing speaks louder than results. Be sure you ask his about his past performances using his methods and how he adjusts his strategies as the market changes. Of course there are plenty of investors out there that subscribe to more than one theory,  as well as investors that don’t understand any of them, so listen closely to what he is saying and be sure he can quantifiably defend his position.

So next time you turn on the business channel and hear two commentators arguing over the best investments, listen to what they are saying and see if you can discern what viewpoint they used to come to their conclusions.

This article is contributed by HealthHarbor.com and previously appeared on ChristianPF.com.

Anyone reading this has probably at some point dealt with a medical bill, or perhaps many medical bills. They come in all shapes and sizes – from the $10 physician visit copay to the $500 dental procedure that fell in the “gap” between your dental and medical policies to the $2,000 ER bill that you incurred while uninsured. When the medical bill just one of many in a stack of obligations you have to creditors, and you’re trying to be the best possible steward of your money, how do you handle it?

On one hand, the case can be made that in the big picture this bill is incredibly important to pay promptly and in full. The money that goes to healthcare providers helps to bring necessary medical services to your community. In the case of hospitals, most of them are not-for-profit entities that provide healthcare to all and provide facilities like an ER to the community.

On the other hand, you probably didn’t choose to get sick, have a toothache, or crash your bike resulting in a prompt visit to the doctor. The prices of medical care, in addition, must be inflated based on the charges for routine services. Plus, that surgeon who you know appears to be doing just fine for himself, so he can wait for the money, right?

No doubt, medical bills are a bit of a different animal from other common bills because of the ethical considerations and short-notice nature of the expenses, but they are still a debt to a provider of a service whom you gave your word to pay back. Now that you have a bill, here are a few things can soften the blow of getting one or more bills from a hospital, doctor, clinic, or other medical providers.

How to negotiate medical bills

Discuss the Charges Up Front – One of the most effective ways to not have sticker shock on a medical bill is to discuss the charges with your provider beforehand. If the service you are going in for is routine, you may find that you can negotiate a discount of 20% or more off the charges, particularly if you are truly willing to shop around (if so, be sure that you’re asking the right questions). The provider may ask that in return for the discount you pay up-front, so be prepared for that.

Check your bill for errors

Review your Explanation of Benefits – The payment adjudication process in healthcare is ripe for errors. Reading the EOB that you receive from your insurance company and comparing it with your medical bill can yield surprising results. There are several points in the medical billing process when a key error can occur creating a higher bill for you than you deserve. The provider may record the wrong insurance for your visit, the visit may be errantly recorded in their system, or the insurer may interpret the claim incorrectly. All can result in an inaccurate medical bill.

Sit down with the EOB and the medical bill, and only when you are satisfied that the correct patient balance made it through to you should you pay off the balance.

Handling past due bills

Discuss Payment Plans – If you just received a medical bill that you can’t pay, don’t worry. Most providers are willing to set up a payment plan that will fit your budget. They don’t want to send you to collections – that is costly for them and the chances of any payment decreases. They would rather put you on a payment schedule that works for them and for you. Pick up the phone and call.

If Worse Comes to Worse, Ask for Help – If you are able to take care of yourself, then take care of yourself. If you’ve hit a financial tough streak, however, you may find that a healthcare provider will heavily discount or even forgive your balance if you qualify for a Financial Assistance program. This is more common with not-for-profit providers. In order to qualify, you’ll need to demonstrate low assets and income and cooperate with the process. Providers are used to people trying to game the system when it comes to Financial Assistance – be straightforward and honest, and they might be willing and able to help.

One of the frustrating things about medical bills it is difficult to budget for them (especially the emergent care kind) and the dollar amount can hurt. Being proactive and direct with your healthcare providers can help a medical bill fit a bit more neatly into your monthly budget.

Back when I was in Navy, packing up and moving around the country on a regular basis was pretty much the norm. I remember one time; I had been living in Charleston, SC for about a year and a half and I was given orders to a training facility in upstate NY. Unlike most assignments, I knew that this school was only going to last for six months before it was time to move again. Because the time that I would be there was so short, and because the workdays (and workweeks) were long, I was encouraged not to buy a house or distract myself with hobbies or other non-work related activities while I was there. It was best just to rent a temporary place and not get to comfortable or collect too much stuff because I would just be packing up and leaving soon and the Navy will not pay to move a lot of junk. Once I got to New York I found out exactly how good the advice I was given really was. The workdays were 12 hours long, 6 days a week and by the end of the day, I was ready to go to bed. When it was all over, I was ready to leave. I got my orders, left my rental, and moved on to my new station.

It’s funny how we can look back at a small part of our lives and God can use it to help put things in perspective for us. In this case, my short stint in NY reminds me that our time here is short. It’s not wise to devote our time to collecting a lot of useless garbage that we can’t take with us. As entertaining as it may be, it’s nothing more than a distraction. We have a job to do, a purpose to focus on. God will provide us with what we need while we are here. And while we are responsible for what we have and what he gives us, that should not be our focus. We have something much better to look forward to when our job is done.

After training in NY, my new orders were to Norfolk, VA. While it wasn’t exactly heaven, it was much better than NY. I had time to get married, buy a house and settle down with my wife and plan a family. It made me realize how right my chain of command had been in telling me not to get too comfortable in NY.

“Each man’s life is but a breath”  Psalm 39:5

The legalism of tithing is why everyone gets edgy when the subject of tithing is brought up, because the giving that is taught to believers is a giving out of obligation and guilt and not one of freedom and joy.

The kinds of giving you refer to in your books, in 2 Corinthians 8 and Acts 2 and 4, are perfect examples of what I am talking about.  That kind of giving came from an overflow of joy and not from the apostles “harping” on getting their giving up to at least 10%. The concept of tithing robs everyone who gives less than 10% from any sense of joy from their giving because they have been made to feel guilty because it is too little.  This guilt will seldom, if ever, produce a joyful giver.

What about a young couple who is only able to give 5%, but for whom this is giving by faith? Wouldn’t God be pleased with that gift, and wouldn’t they be blessed even though it falls well below the Old Testament requirement?

Answered by Randy Alcorn

According to a 2002 Barna poll, only 3% of Christians give 10% or more. Most of these are in churches that emphasize tithing.

So waiting for people to overflow with joy is not working very well, is it?

Acts 2-type giving came into my life after I tasted the joy of giving, but had I been told “giving is completely optional, no need to stretch yourself, start anywhere you want,” I wonder how far I would ever have gone in giving.

I believe that nearly any young couple in this country could give 10%, and if they did, they would experience joy and see God do great things. But the average American Christian gives away 2.5% of his income. To say that God is happy with His people (who He went to the cross for, and who He put in the most affluent society in human history) giving one fourth of what He required of people without the indwelling Messiah, living in poverty, is something I find difficult to imagine, both biblically and logically.

There are innumerable younger and older people in our churches who could give away 10% simply by forgoing Starbucks, Hollywood Video, and eating out-not to mention new cars, home entertainment centers, etc. In other words, we’re not even talking sacrifice. I suggest that starting at 5% “or whatever you choose” is not really being helpful to those people. Would I rather that they give 5% than nothing or 2%? Of course. But I just don’t see the removal of the tithe as the training wheels being any real solution to getting people up on the bicycle of giving. Since we have to start somewhere, why not start where God started with His people?

I also believe that to think of most churches being full of legalistic tithers is out of touch with reality. That Barna poll found that only 3% of Christians tithe. If we found that only 3% of Christians observe a day of rest, would we conclude our churches are full of legalistic sabbath-keepers? I wouldn’t.

10% is not some lofty goal, just a starting place, but starting is important. The question is whether we should encourage people to move from nothing and 2, or 3% to 10%, where God started his nation Israel, as a stepping stone to the truly generous giving to be found beyond 10%.

What I say to people is, if you’re uncomfortable starting at 10% because you think it’s legalistic, that’s fine; start at 11 or 12% or 20%, or 40%. But if you’re going to start at less than 10%, then realize you’re elevating the law over grace by saying that the law produced greater fruit in a poor culture than the transforming work of the Holy Spirit does in an affluent culture. Personally, I just can’t buy that.

by Randy Alcorn,

Eternal Perspective Ministries,

39085 Pioneer Blvd., Suite 206,

Sandy, OR 97055, 503-668-5200,

www.epm.org,

www.randyalcorn.blogspot.com

This is an article originally posted at DebtGoal.com that gives a good basic explanation of what factors are taken into account to determine your credit score. This information is important because of how prominent credit scores have become in daily life. Even if you don’t currently have any debt and don’t ever intend to, your credit score can come into question for many other “less financial” reasons. Many employers are starting to require a credit check for new applicants, the U.S. government requires it as part of a security screening, and even many banks  run credit checks before allowing you to open a new account.

Understand Your Credit Score

Credit Basics: How Banks Price Risk

Credit is simple.  The more likely a borrower is to default on a loan, the higher the likelihood that the lender will lose money on that loan, even with the interest fees.  As a result, lenders often refuse to make loans to risky borrowers or charge higher rates because they know that some portion of risky borrowers will default.

Although this sounds unfair, it’s is simply the lending market at work: pricing the default risk as an implicit cost of making the loan.  The difference in cost can be dramatic.  Two people getting a $200,000 loan on the same house might pay very different interest rates based on their credit histories.  A borrower with a high credit score might qualify for an interest rate of 6% while the less creditworthy borrower might qualify for a 7.5% rate.  This difference of 1.5% in interest rates translates into a higher monthly payment of $250 and adds up to over $70,000 in higher interest payments over the life of the loan.  Just think what you could do with that savings!

Getting Your Credit Score

Although you can get a copy of your credit report for free at www.annualcreditreport.com, you will generally have to pay to get your credit score.  You can purchase this at www.myFICO.com.

Credit Scores: Your Credit History in a 3-Digit Number

Before the advent of the credit score, lenders used to carefully review each potential borrower’s credit file for signs that they would faithfully repay the loan.  As lenders grew in size and volumes of transactions, this personal review process became cumbersome and full of variation.  As a result, methods were created for summarizing all the information in your credit file into a single number.

This credit scores provides a standardized way of comparing the risk that a borrower will default on a loan.  The higher your score, the less risk you present of default, so lenders will be willing to lend to you at a lower rate.  Because not all lenders report to all credit bureaus, the three major credit bureaus may report different credit scores.

The first company to popularize the credit score was Fair Isaac, creator of the FICO score.  Since then, other scores have emerged, but the FICO score remains the most popular.  Regardless of the model used, credit scores are generally between 350 at the low end to 850 at the high end.

How Your Credit Score is Determined

FICO scores are determined by assigning varying weights to five important factors:

1. Payment History (35%)
   Borrowers who are current on their accounts generally have lower default risk.  Delinquencies, late payments, collection actions, and bankruptcies have a major negative impact on your score.  The more recent the delinquency is, the larger the negative impact.  The good news is that by paying on time, your credit score can start to improve in as little as 6 months, although bankruptcies will stay on your credit report for 10 years.
2. Outstanding Debt and Credit Line Utilization (30%)
   This factors in your overall debt levels on auto and home loans as well as how close your credit card balances are to the credit limit.  This last factor, your credit line utilization (total credit card balances divided by total credit line), measures how much of your credit you are using.  Fair Isaac has found that borrowers who use a higher percentage of their available credit are a higher risk of default.  Your credit line utilization should ideally be less than 25% and roughly the same on all cards.
3. Length of Credit History (15%)
   A long credit history gives creditors an idea of your payment actions over a period of time. If you have a short credit history less is known about your risk and therefore creditors conservatively rate you as higher risk.
4. New Credit and Credit Inquiries (10%)
   Opening a new account may indicate that you are taking on debt obligations that you won’t be able to manage or that you are desperate and are relying on credit to meet expenses.  Similarly, applying for credit which shows up as a hard inquiry on your credit report, may indicate that you are about to take on more debt than you can handle.  Soft inquiries from pre-approved offers, current lenders evaluating your credit, landlords, or yourself do not count against your score.
5. Types of Credit (10%)
   Having a mix of different types of credit such as credit cards, auto loans, and mortgage show experience managing different types of debt and this mix will positively impact your score.  Certain types of debt like in-store financing are correlated to higher default risk in borrowers and will negatively impact your score.

Improve Your Credit Score

1. Review your credit report and correct errors.  You can request one report from each credit bureau every 12 months at www.annualcreditreport.com.  Review your report for inaccuracies and request a correction from the credit bureau where it appears.  By law, the credit bureau has 30 days to dispute your claim with the lender.  Remember to keep a copy for your records.
2. Improve your payment history by getting current and staying current.
3. Reduce your credit card balances until your credit line utilization is less than 25%
4. Don’t open or apply for new credit.  Both of these will reduce your credit score
5. Don’t close unused accounts.  Although this sounds counter-intuitive, closing an unused or zero-balance credit card will reduce your available credit line and therefore increase your credit line utilization.  Unless this card has an annual fee, leave it open.

Translate Your Higher Score into Lower Rates

After you have made significant progress paying down credit card debt and maintaining a consistent on-time payment history for 6-12 months, your credit score may have improved dramatically.  At this point, you can translate your higher score into lower interest costs.

1. Lower your remaining credit card rates by calling your credit card company and asking for a lower rate.  They will pull your score and, recognizing that you could get lower rates elsewhere, may offer to lower your rate.  Renegotiating with your current card issuer is always preferable to getting a new card, as the new hard inquiry will lower your score.
2. Refinance your mortgage.  If your score has improved significantly, the savings can be substantial.  Do your mortgage shopping within a 2-week window, as the scoring algorithm treats all hard inquiries within a short period of time as a single inquiry if done for the same type of loan.
3. Take advantage of new balance transfer offers if these have become available to you.  Your credit score will take a hit, but the lower interest costs may justify it and it will rebound quickly as you continue to make payments on time and to reduce credit card balances.

Scott Crawford is CEO of DebtGoal.com, a do-it-yourself system for getting out of debt and lowering your interest costs.  DebtGoal.com incorporates all of the techniques discussed in this post and can help users understand and get visibility to and manage their debt finances.

This is a question that most of us who have had credit cards or loans in the past have asked ourselves. There is a certain sense of freedom knowing that you won’t have those monthly payments to deal with or the compounding interest to fight against anymore. Who hasn’t thought that life would be better without having to make that monthly car payment? And with all that extra money, just think at how fast you’ll be able to replenish your savings.

Unfortunately, this isn’t usually a good idea. Your savings is your first line of defense against disaster. It’s your heavy winter coat when you’re in a snowstorm, or your suit of armor on a battlefield. Sure you could drop it and try to use your increased speed to get out of the blizzard or take off the armor and try to out maneuver the enemy, and you may even succeed, but one accident and it’s all over.

“Divide your portion to seven or even to eight, for you do not know what misfortune may occur on the earth”   -Ecclesiastes 11:2

“The wise man saves for the future, but the foolish man spends whatever he gets” -Proverbs 21:20

Trying to gain a financial advantage at the expense of your safety net is a hasty approach to a situation where your patience will pay off. It’s better to keep your savings in place in case of an emergency and steadily and faithfully pay down your debt. If you really want to pay down your debt quickly (and safely), you would be better off diverting some of the money that you put into savings each month to paying down whatever debt is bothering you.

“Steady plodding brings prosperity, hasty speculation brings poverty”

-Proverbs 21:5

The rule of thumb is to keep between 3 and 6 months worth of income in savings in case you lose your job. If you’re at a point where your savings could support you if you lost your income, then by all means, pay down that debt. Just be sure that you don’t cripple your savings account in the process.

Even though the words “income tax return” may send a chill up your spine, there is at least one reason to look forward to tax day. Several resturaunts around the country will be giving out discounts or freebies as comfort food. I’m not sure if it’s to help ease the pain of filing your taxes or if it’s to celebrate not having to think about them again for another year but either way, if you enjoy eating out here are some great deals to take advantage of.

P.F. Chang’s Discounts – The P.F. Chang’s chain is keeping it simple with a 15% discount for folks who dine at its 193 restaurants on Tax Day.

Free Groceries - Food emporiums accross the country will be participating in a tax day promotion for the first time by handing out freebies today, but I’m not sure exactly what they will be giving away free. If you find out, please let me know.

Free ice cream. MaggieMoo’s Ice Cream and Treatery will give away single-scoop servings to customers at 200 stores in what it calls an “e-cone-omic ice cream stimulus package.”

Free sweets. Snack chain Cinnabon will give out Tax Day Bites, free bite-size cinnamon rolls usually known as Classic Bites, from 5 to 8 p.m. at its 700 outlets on tax day. Mmmmmm…Free Cinnabons……

Free tacos. At its 275 restaurants in the West, Taco Del Mar will run a promotion: “Taxes Suck. Tacos Don’t.” People can register at the Taco Del Mar website for an e-mailed coupon for a free tax day taco.

Free gift cards. T.G.I. Friday’s will give Tax Day customers $5 Bonus Bites gift cards for food and beverage purchases of $15 to $25 and $10 cards for those who spend more than $25. Members of the 1,000-outlet chain’s frequent-customer program also will get double points.

If you haven’t filed your 2008 taxes yet, today is the deadline. If you’re just finishing up they won’t be considered late if they are post marked for today. For those of you who are waiting until the last minute, here are a couple of sites that will help you do your own taxes and e-file online.

www.TaxAct.com

www.TurboTax.com

www.HRBlock.com

www.RapidTax.com

And if you like to work your taxes out on pen and paper, don’t forget that you can still e-file your federal return for free on the IRS site www.irs.gov/efile/.

Also, if you are mailing your taxes through snail mail, they won’t be considered late if they are post-marked for today.