Are You Maximising Your Credit Card Benefits?

Credit Cards in Malaysia offer a host of benefits and rewards - but are you really making full use of what you've been given?

Credit Cards come with a host of benefits in Malaysia. Unlike their counterparts in many other countries (which do not offer perks at all!), we're pretty lucky.

Cards here come complete with merchant discounts, reward points, free services, and cashback to entice users to spend. But many users forget to use their credit card benefits, wasting tonnes of money-saving perks every year.

Have you neglected reading the benefit brochures or bank website? Check out some of the most common benefits tied to credit cards that you could have been missing out on.

Free Services

Few people realise that many credit cards come with some completely free services. These include free travel insurance, entrance into plaza premium lounges, free night stays at select hotels*, cab rides from the airport, golfing green fees, and concierge services if you are overseas.

These services are completely free but often come with some requirements and are capped per year but you still can save a good amount by making use of them.

*Free night stays are usually earned if you purchase a requisite number of nights with the same hotel on your card.

Retail Discounts

You've probably seen those signs at retail or restaurant counters - discounts if you use X or Y credit card. The sign is only the tip of the iceberg. Every bank in Malaysia will offer discounts at retail stores and restaurants but because there are so many - countertops won't display all the participating banks.

Some banks admittedly have more participating merchants than others but it's always worth a try to find out if the stores you frequent are tied into one of the bank credit cards you use. To find out, best to check the bank website or contact them for a full brochure of retail discounts. Retail cashiers are not always clued in to all promotions so best to go back to the source.

Tip: Many retail cashiers are overworked and keying in bank discounts is low on their list of priorities. To make sure you get the discount you are entitled to - remind them about it before allowing them to swipe your card.

Passes and Priority Service

Credit card companies often team up with entertainment venues such as movie theatres, recreational centres (bowling, archery, futsal, etc), and select concerts. This gives cardholders priority lanes for booking and purchase of tickets or choice pick of VIP passes.

If you are keen on attending an event, concert, movie or simply have a fun time at an entertainment centre - keep your eyes peeled for bank logos. Some entertainment credit cards offer these benefits all year round, in which case, a call to the bank is all you need.

Reward Point Redemption

Reward points often go unused as many cardholders don't pay much attention to how many points they have or unwittingly believe that redemption is a hassle. This is no longer true.

Banks today offer the convenience of even paying for purchases with points alone at select retail stores or allowing you to redeem vouchers, items, or offset your card balance with a simple redemption phone call.

Do keep an eye out for reward point expiry dates as not all points are evergreen. You don't want to miss the chance to redeem free stuff!

Cashback

We left cashback for last because it is usually a perk that is automated and you don't really have to do anything to redeem. However, you could maximise your cashback returns if you pay attention to the fine print.

Check cap amounts, peak days, or merchants where you earn more cashback. If you follow the schedule - you could earn up to your capped amount of cashback faster.

How to Maximise Your Benefits

It's great that we've listed these benefits for you, you think - but how in the world do you go about using them? It all sounds much too complicated!

In truth, it isn't. There are only a few steps required before you are on your way to free stuff from your card all year round! Whip out your trusted cards and go through these steps to find out if you're really using them for all they're worth.

1) Peruse the bank website. Almost all bank websites will feature a page with the list of benefits they offer. For card-specific benefits, you will need to look up your particular card on the bank website. For general bank retail discounts - do a quick search on the site for the page on retail discounts and promotions.

2) Check your statements. Your statement doesn't just tell you the amount you owe the bank - it also carries featured merchant ads, your reward point balance, and often comes packaged with a brochure of benefits. If you've switched to e-statement, you can still find your reward point balance on it but you will need to do the next step for the discounts.

3) Contact your bank. If you didn't receive a brochure or have lost the one you did - give your bank a call and ask them if they would be so kind as to send the brochure to your registered address. You can also call them if you are planning a particular visit to a restaurant, hotel, or merchant and would like to know if any deals exist.

4) Check your email and spam box. Banks often send emails to users when select promos are ongoing. These are usually the bigger promos with more prominent merchants but it could just be the merchant you frequent. Keep your eyes peeled when these emails come in so you don't miss another promo.

Source: https://ringgitplus.com/en/blog/Credit-Cards/Are-You-Maximising-Your-Credit-Card-Benefits.html

Six Habits That Can Land You Deep in Debt

Debt is the worst  poverty (Thomas Fuller)

If you’ve ever been in debt, you know just how soul-crushing and stressful it can be. When you’re deep in debt, you have to plan your life around it. And if your dollars are stretched too thin, you may have to sacrifice other financial goals to keep up with those monthly payments.

Unfortunately, a lifetime of debt is something Americans know too well. According to Federal Reserve figures, the average household carried a credit card balance of $7,281 in 2015. And if you exclude the households with no debt, the average outstanding balance surges to $15,609.

Digging Your Own Debt Hole

That kind of debt usually doesn’t happen overnight. While some people wind up in debt through no fault of their own, the vast majority of those who are in debt end up there after years — or even just a few months — of poor money management.

Here are some unfortunate money habits that can lead to a mountain of debt over time:

Impulse Spending

According to a 2014 study of 1,000 adults administered by CreditCards.com, three out of four people openly admitted to shopping on an impulse. Those who responded positively said they purchased things when they were excited (49%), bought stuff out of boredom (30%), shopped when they were sad (22%), made impulse purchases out of anger (9%), and made unplanned purchases when they were intoxicated (9%).

While an occasional impulse purchase may not break the bank, constant overspending may be cause for worry. And if you make a habit of putting those unplanned expenses on credit, impulse spending can cause you to spiral deep into debt over time.

Eating Out All the Time

According to Commerce Department data released this year, restaurant and bar sales overtook grocery store spending nationally in March 2015. Yes, you read that right: For the first time, we are spending more on dining out than we are on groceries — and with disastrous consequences for our pocketbooks.

While eating out is only problematic if you don’t plan for it (and can’t truly afford it), a little goes a long way. And if you’re prone to put that restaurant meal on a credit card, this habit could do a lot more than eat up your expendable income; it could cause your credit card bills to surge over time.

Going Sans Budget

Even though budgeting is nothing more than a plan for your money, the dirty “b-word” gets a bad rap. Unfortunately, going without a budget is one of the easiest ways to wind up in debt. After all, how can you be aware of how much you’re spending if you aren’t actually keeping track?

Unfortunately, a fairly recent Gallup poll shows that only one in three Americans creates a detailed monthly budget or spending plan. When you consider that unfortunate statistic, it’s really no wonder so many of us are deep in debt.

Going Without an Emergency Fund

What happens when you have an unexpected medical condition that keeps you away from work? An emergency home repair? An expensive legal situation you must take care of?

If you don’t have an emergency fund, you might be tempted to rely on credit in the short term. And unfortunately, using credit as a crutch can come back to bite you. If you rack up debt due to an emergency and don’t have a plan to pay it back, you could easily wind up in debt for the foreseeable future.

Embracing Lifestyle Inflation

If you’re growing in your career, you might enjoy a hefty raise or annual bonus. What you do with that raise can have an equally important impact on your finances over time.

If you save that raise each year and learn to live on last year’s income, for example, you could have a lot of money stashed away by retirement. But if you allow your expenses to creep up as you earn more, you will always wind up living at the edge of your means.

That’s why many people refer to lifestyle inflation as the ultimate net worth killer; if you constantly spend all that you earn, your annual bonuses and raises won’t actually help you grow rich over time.

Making Minimum Payments on Credit Cards

If you’re making the minimum payment on your credit card, you should brace yourself for a lifetime of debt. With credit cards carrying APRs anywhere from 4.9% to 24.99%, your small revolving balance could grow a lot faster than you ever anticipated.

Remember how the average indebted household carried $15,609 in credit card debt in 2015? That kind of debt doesn’t happen to those who make a habit of paying their credit card balances in full each month. No matter what, making the minimum payment on your credit card is a surefire way to land deep in debt.

The Bottom Line

While good financial habits can help you avoid debt and grow your nest egg over time, bad habits can lead to a lifetime of monthly payments — and even financial ruin.

Recognizing toxic habits early — and doing something about them — is the best way to squash bad habits and replace them with behaviors that will help you in the long run.

10 Common Reasons Merchants Reject Your Credit Card

Did a rejected credit card leave you stranded at the point of sale? Knowing why this happens can help you avoid such mishaps in the future.

You’ve spent months scouring the Internet for the perfect washer-and-dryer combo to complement your newly renovated laundry room. Finally, you’ve located what appears to be the right match at a great price.

Suddenly the deal is off. Your credit card won’t go through, and you have no other immediate form of payment to use.

It’s happened to many of us, and it’s not always the result of financial irresponsibility.

Here are factors that could trigger a credit card rejection, along with tips to remedy the problem.

1. Maxed-out card

Exceeding your credit card’s spending limits can have negative consequences, both in the form of fees and denials.

It also can damage your credit rating because of the utilization factor, which accounts for 30 percent of your FICO credit score.

If you’re close to the limit, you can try to request an increase. But don’t use that as an excuse to go on a shopping spree and increase the height of your debt mountain.

2. Fraudulent purchases

If your credit card issuer suspects a fraudulent purchase is being made with your card — or if you have actually reported such fraud — it will prompt a freeze.

Such activity — real or suspected — also could result in the closure of the current account, followed by the issuance of a new card.

If your account is frozen, promptly contact your credit card issuer to validate the purchases.

3. Authorized user dropped from the account

Perhaps you have been an authorized user on a credit card account, but the person whose name is on the card has decided to revoke your rights. In such instances, you will be cut off from using the account.

You can also lose temporary access if the cardholder has reported the card as lost or stolen.

To avoid being caught off-guard, simply keep the lines of communication open with the person whose name is on the card.

4. Transaction holds

Transactions such as securing a hotel room or renting a car could result in a hold being placed on your account. If you are close to your credit card’s limit, the card could be rejected at a subsequent point of sale until you’ve paid the final bill and the holds are lifted.

To avoid running this risk, keep your balances low to maintain a large amount of available credit.

5. Foreign/international transactions

Foreign transactions can raise credit card companies’ suspicions about fraudulent purchases being made with your card, resulting in a freeze on your account. That can be true even if you are in the U.S. but making a foreign purchase online.

The solution? Before you travel, let your credit card company know that you will be far from home, including where you will be and when you will be there. And always alert them in advance about foreign transactions conducted online from the comfort of your own home.

6. Unusual purchases

If you make a purchase that seems odd based on your prior spending behavior, it may be flagged by the credit card company.

Two years ago during Black Friday, I headed to Saks Fifth Avenue in search of some goods whose prices were steeply reduced. My purchases came to $458. The card was quickly denied.

When I called the bank, it released the hold but told me that because I usually don’t shop at “high-end” stores, the bank figured my credit card information had been stolen.

Let your credit card company know if you plan to shop at a different type of store or to make a usually large purchase. At the very least, always have a backup way to pay.

7. Delinquent accounts

Ignore the balance due long enough and the magic plastic may suddenly lose all of its powers. Whether you suffer this fate depends on the issuer and your history with the company.

Other negative consequences that may result from not paying your bill include:

• Damage to your FICO score once the activity is reported to the credit bureaus.
• Lower credit limits if the issuer views you as a greater risk than before.
• Fees for late payments.
• A higher interest rate.

To avoid the risk of delinquency, set up payment reminders. If money is tight, reach out to the creditor to see if payment arrangements can be made or whether any additional remedies are available to you.

8. Card has expired

If you didn’t get a new card in the mail before your card’s expiration date, call your card’s issuer. It is possible you have been a victim of mail fraud.

Of course, it’s also possible that the card was mailed to you, and you mistook the envelope for a piece of junk mail before tossing it in the trash.

9. Transposed numbers

Sometimes you are asked to provide a ZIP code or the security code on the back of the card to confirm your identity at the point of sale. Mix up any digits, and rejection will follow.

You can always retry. But if you make too many errors it may prompt your credit card issuer to lock you out of using the card until you call to explain what happened.

10. Closed account

A credit card company can close your account for all sorts of reasons, and it doesn’t have to give you advance notice. CreditCards.com says:

Even if you’re not in default, an issuer can boot you at any time. The most common reason is that you’re not using the account often enough.

To lower the odds that your account will be closed, simply be a good customer. It’s a good bet that your card company will keep you if you use the card regularly and responsibly and always pay your bills on time.

Has your credit card been rejected at the point of sale? Tell us about it in our Forums. It’s a place where you can swap questions and answers on money-related matters, life hacks, and ingenious ways to save.

Source: http://www.moneytalksnews.com/9-common-reasons-your-credit-card-was-rejected/?all=1

How to Pick an Emergency Credit Card

In times of financial emergencies, credit cards could be your knight in shining armour. We've magnified some of the properties you should look for in an emergency credit card.

Several terms have been coined to ideally describe a state of financial 'emergency' – some call it bad luck, poor timing, dead broke, while others just call it plain old not having tangible cash!

Whatever the moniker, its fundamentals don't change because when a money emergency occurs and you've exhausted all possible options of keeping your head off life's chopping block, the plastic that you keep tucked only for emergencies just might keep you buoyed for the time being.

In the spirit of yielding an umbrella in the wake of looming dark clouds (yes, directly translated from Bahasa Malaysia), we've identified key points that you would need to look for in an emergency credit card that could wipe your worries away in almost any comprehensible conundrum.

Low-Interest Rate

Scrubbing through the myriad of credit cards available in the market for this attribute comes second nature to every credit card hunter.

No doubt a low-interest rate might trigger your frivolous spending if treated as a regular credit card, but it serves emergency credit cards best with rates as low as 8.8% p.a as opposed to the standard 15% - 18% p.a.

Should you diligently be able to keep the low-interest rate credit card only for emergencies, you will find that the fat bill you just swiped will not incur a painful interest rate that could keep you from settling the outstanding amount. Conversely, it would definitely mean a steep climb toward clearing the debt post-emergency.

No Annual Fee

Most cards in the Malaysian market offer credit cards with annual fees at a flat zero, however many only offer the benefit if you swipe more than 12 times a year. This is a hassle if you don't plan to use your emergency card often (or are you expecting 12 emergencies per year?).

From a logical standpoint, should you be signing up for an emergency card, an annual fee of any sort would be a rent-my-pocket fee for no good reason. So do read the terms to find a credit card that truly is free for life without the conditions.

Having an annual fee on plastic that you hardly swipe other than during times of desperation would only add to your credit burden. By desperate situations, we don't mean Black Friday (you have cashback credit cards for that)!

Low ATM Withdrawal Fees

A little intertwined with the low-interest rate from the point above, low ATM fees also prove to be a strong necessity in emergency credit cards.

In the event that your plastic swiping abilities are ineffective due to a desperate need for tangible cash, an emergency credit card with low cash withdrawal fees would be your best bet as credit cards typically have quite a large fee on cash withdrawals.

Rock bottom ATM fees allow you to take the monthly installment in healthy strides and like the aforementioned, these cards are supposed to come to your rescue, not drown you in endless debt.

 High Credit Limit

Credit cards offer a different range of credit limits even though they follow Bank Negara guidelines on the issue, and one with a high spending limit is most welcome during times of financial emergencies.

This means that the credit limit you receive even though your salary is the same on all applications may differ from bank to bank unless your salary is between RM2,000-RM3,000 per month. Your credit record on CCRIS will also play a part in how much of a limit you are given.

Sometimes a little trial and error are in order. If a card you applied for is not giving you a good deal -cancel it and get a new one!

Emergencies such as hospitalisation and perhaps being completely stranded in a foreign country might end up being pretty exorbitant, and the last thing you need is an emergency credit card that is not able to serve its purpose.

Protection and Insurance

This doesn't mean you get to ignore your medical card insurance altogether because that in itself can be considered an emergency fund.

However, you can find other kinds of protection for travel and personal accident linked to credit cards. More commonly found in travel credit cards, this attribute is indeed a commodity for emergency credit cards.

In ill-fated incidents that occur overseas such as losing all of the local currency or simply running out of them, travel credit cards can prove very helpful in avoiding distasteful encounters with foreign authorities, immigration, or both!

Other perks of an emergency credit card that can serve you out of the country are one that can be accountable for lost baggage and hospitalisation, which are the most popular from a wide list of coverage depending on card exclusivity.

Alleviating the Unforeseen Circumstances

Its no doubt, there are some amongst us who can survive the strike of an unfortunate event that creates a financial state of emergency with no emergency credit card, but that does not completely grant anyone immunity from ridiculously expensive emergency scenarios.

You might even be a regular card owner and making sure your current credit card has checked as many as possible out of the above and will surely come to your aid in good times as well as troubles.

If the incredible amount of credit cards in the market confuse you, be sure to check out our credit card comparison for emergency credit cards and more to suit your lifestyle.

Source: https://ringgitplus.com/en/blog/Credit-Cards/How-to-Pick-an-Emergency-Credit-Card.html

7 Ways to Improve Your Investment Returns

To create a large investment portfolio, you need to save money regularly, invest consistently, and learn to stay the course for as many years as it takes. There are, however, several strategies that can help you improve your investment gains over time. This post highlights a few of those strategies.

Improve Your Investment Returns with These 7 Strategies

1. Find Lower Cost Ways to Invest

It’s easy to ignore investment expenses during bull markets – especially if you’re making money. However, the impact of those expenses can really add up over time, and not in a good way.

In fact, lowering your expenses by just 1% can make a huge difference in the performance of your investment portfolio over the long-term. Let’s say that you’re earning an average of 10% per year on your portfolio, but paying 2% in investment fees of all types. That will leave you with a net rate of return of 8%. If your portfolio is $100,000, it will grow to $466,097 after 20 years.

If you can cut your annual investment expense in half – to just 1%, your effective net return will rise to 9%. If your portfolio is $100,000, after 20 years it will grow to $560,440. That’s a difference of roughly $94,000, and it is earned simply by cutting your investment expenses by 1%. Investment expenses DO matter!

To find the lowest fees possible, look for an online broker that has either a low- or no annual fee, and lower transaction costs. Favor funds over individual securities (since you won’t trade them as frequently), and choose no-load funds wherever possible.

2. Get Serious About Diversifying Your Portfolio

Most of us know about the importance of diversification. But, just as is the case with investment expenses, the concept can easily get lost during a bull market. After all, if your stock allocation becomes disproportionately large in a rising market, it will actually help your portfolio performance – at least for as long as the bull market lasts.

But that’s the problem – bull markets never last. The August mini-crash should be a wake-up call to anyone who has been ignoring proper diversification over the past few years. Markets fall much more quickly than they rise, which means that advance preparation is completely necessary. And that is what diversification is all about – preparing for changing circumstances.

No matter how well your stock allocation is doing, be sure to maintain appropriate percentages of your portfolio in both fixed income investments and cash equivalents. They will help to reduce the losses you’ll experience on your stock allocation in a down market. Remember, minimizing losses during a bear market is just as important as maximizing your gains in a bull market.

3. Rebalance Regularly

Rebalancing is all about returning your portfolio to its original level of diversification. If you originally planned to have 60% of your portfolio invested in stocks, 30% in bonds, and 10% cash, it will be time to rebalance if your stock allocation has grown significantly higher than 60%.

The same is true in a bear market. If your stock allocation has fallen to 40% due to the declining market, you should rebalance to increase that position. It will enable you to take advantage of gains when the market recovers.

4. Take Advantage of Tax-Efficient Investing

Like investment expenses, income taxes on your investment earnings have a substantial impact on the performance of your portfolio. While it’s not usually possible to make them go away completely (unless of course, you are investing in a tax-sheltered plan, like an IRA), it’s very possible and absolutely necessary to minimize investment taxes whenever possible.

One of the best ways to do this is to avoid heavy trading. Trading generates capital gains, and capital gains result in capital gains taxes. Those taxes – along with all of the trading fees involved – can result in a portfolio that doesn’t perform materially better than a buy-and-hold model that’s invested primarily in funds.

And speaking of funds, you should favor index-based exchange-traded funds (ETFs). Since such funds are tied to the underlying index, they only trade stocks when the index changes. That means that they trade stocks far less than actively managed mutual funds. That minimizes your capital gains, which ultimately minimizes capital gains taxes.

5. Tune-Out the “Experts”

Have you ever heard an expert confidently predict that the Dow is going to 25,000 – or crashing down to 5,000? Ignore them. “Experts” who make claims like that are nothing but crystal ball gazers. They have no more insight as to where the market is heading than you or anyone else, but they sure think they do.

But, that doesn’t mean that they’re harmless. Since they deal primarily in hyperbole, they can get your attention easily. After all, no one ever wants to get caught napping while big things are happening. And if a self-styled expert can cast himself as credible, you may just decide that he’s someone who knows what’s really going on.

If you want to be a successful investor, particularly on a long-term basis, you’ll have to learn how to tune out this kind of chatter. All it does is distract you from your own investment goals and strategies, and that won’t help you in the long run.

6. Continue Investing in Your Portfolio No Matter What the Market is Doing

A portfolio that is growing through a combination of investment gains and regular contributions can grow dramatically. You should never allow the direction of the market to affect your contributions – but sometimes that’s exactly what happens.

Both bull markets and bear markets can cause you to be hesitant to continue contributing to your portfolio:

• During bull markets, strong investment returns can easily convince you that continued contributions are no longer necessary.
• During bear markets, you may become convinced that contributing to your investment portfolio is an exercise in throwing good money after bad.

Both assumptions are completely counter-productive. Contributing to your portfolio during a bull market will not only cause your portfolio to grow faster, but it will also provide you with fresh capital for more investments.

Continuing to contribute to your portfolio during a bear market is even more important. If your portfolio is falling in value due to negative returns, your contributions will be the only factor that minimizes the decline. Even more important, the new cash that you put into your portfolio will represent capital to buy stocks at deep discounts when the market is at the bottom, and finally begins to move in an upward direction.

7. Think Long-term

Probably the worst delusion that can affect any investor is the “get rich quick” mentality. It’s especially hard to resist during bull markets. Everywhere you look, there are experts promising that you can double or triple your money in just one or two years by following their plan. It’s utter nonsense!

Like paying off a mortgage, building a career, or raising a child, successful investing requires both time and patience. You should never measure your time horizon in months, or even years – but rather in decades. By investing $10,000 per year in an index fund with an average rate of return of 8% over 30 years you will accumulate nearly $1.25 million. That may not be get-rich-quick, but it is a way to get rich – and that’s what really counts.

Making Your Investment Strategy Work for You

You’ll have to adopt a long-term view, and maintain the discipline to contribute your savings plan each and every year, and not allow yourself to get sidetracked by various get rich quick schemes along the way.

If you are already doing that, then you are on the right path. But you might have to use some of the strategies above to tweak your investment returns to higher levels.

Source: http://www.doughroller.net/investing/7-ways-to-improve-your-investment-returns/

6 Reasons Why Avoiding Credit Is Costing You

Remember that Credit is Money

As a teenager, I was repeatedly told that establishing credit and using it responsibly to build a high score was paramount to my long-term financial success. Too bad I completely ignored the latter part of that advice and found myself in a mountain of debt by the age of 21. And it’s around that time that I decided to complete a self-study course on financial literacy by a well-known expert. A bulk of the information shared seemed practical, but there was one section that left me scratching my head.

It was the part about debt-management; the instructor insisted on avoiding debt at all costs or it could be detrimental to your long-term financial health. While there is some truth to this statement if a debt is not managed responsibly, I’ve found that ditching credit altogether in favor of cash can come back to haunt you.

Here’s why:

1. Potential Lenders Can’t Properly Evaluate Your Application

Turns out having no credit is just as bad as having poor credit. Reasoning: lenders use your credit profile to gauge your credit risk based on several factors, such as payment history. But if nothing’s there, chances are your application for credit will be denied, or even worse, you may only qualify for the inferior products.

2. Exorbitant Security Deposits

If you just moved into a new place and need to activate cable, internet, electricity, water, or any other utilities, the provider may require a hefty refundable deposit if you have a minimum payment history. The same rule applies to cell phone providers: they’ll want to collect a lump sum upfront to be used as collateral in case you default on your monthly payment for services later on down the line.

3. Limited Credit Card Options

That irresistible credit card offers you see on television or internet advertisements are usually reserved for consumers with excellent credit. While lenders evaluate an array of factors to determine if you qualify for the most competitive offers, having a score on the higher end of the spectrum will definitely boost your chances. Until then, you’ll have to settle for a secured card or one with an outrageous APR should you decide to apply.

4. Good Luck Securing Travel Reservations

It’s practically impossible to make travel arrangements without some form of plastic. And if you use debit for lodging or rental reservations, don’t be alarmed if a large hold is placed on your card and remains intact for a week or so following the trip.

5. Limited Options When Renting

Need to rent an apartment? The landlord will want to run a credit check, even if you’ve proved you can afford the monthly payments. If you have little to no credit history, don’t be alarmed if they require first and last months rent along with a security deposit, or reject your application altogether if there are more qualified applicants on the waiting list.

6. Increased Insurance Premiums

Lenders, creditors, and landlords aren’t the only entities that may want to take a peek at your credit. “Approximately 95% of auto insurers and 85% of homeowners insurers use credit-based insurance scores in states where it is a legally allowed underwriting or risk classification factor,” according to the National Association of Insurance Commissioners. And the lower the scores, the higher the premiums. The good news is if you reside in California, Hawaii, or Massachusetts, you aren’t subject to this screening.

Bottom line: I’m not suggesting you apply for every credit offer that comes your way or else you could end up buried in a sea of debt, struggling to stay afloat. However, you shouldn’t completely ban them or you will have to fork over more dough than you initially bargained for should you need to borrow cash later on down the line.