Business and Finance

Posts Tagged ‘credit’

Although usually consider that loans and credits are synonymous, they are actually two different products.

A loan is a financial transaction in which an entity or person (lender) delivers another (the borrower) a fixed amount of money at the beginning of the operation, provided that the borrower will return that amount along with the interest agreed in a specified period. The amortization (repayment) of loan is usually done by quotas regular (monthly, quarterly, half …) over that period. Therefore, the operation has a predetermined life. Interest is charged on the total of the loans. Read the rest of this entry »

The credit is very valuable. Without good credit, it is very difficult to progress. People with good credit have done so because they have been responsible with their money: spend less than you earn, pay all your bills on time, and request new credit only when you really need. Achieving this is something that takes years.
Latin culture has much to do with it

In the Latin culture is very common share what we have with our friends and loved ones. “What little I have I share with you” is something you hear much. This is a very noble way of living and should be performed. But there are instances where we can share what you do serious damage to the person who gives, it receives and the families of both. This is the case with credit.

Share the credit: the case of John and Julia
John and Julia have fought for 15 years to have good credit. Then one day a cousin called John who is going through a difficult time and needs help. He asks John to be guarantor for a credit card. John, wanting to help his cousin, says yes. Six months later, the card is the limit, 90 days late payments and creditors are knocking at the door for John to pay. Or worse a good friend then asks for a credit card given to John because he did not qualify for one and he promises his cousin who will pay without fail. After not doing so, John and Julia are also responsible for the balance and your good credit is at risk.

In this case, everyone loses:

1. John and Julia damage their good credit, which will cost them more money in interest.
2. John and Julia are now liable for the debts accumulated by third parties (the cousin and friend.)
3. Even worse, John and Julia no longer qualify for the mortgage which had to finally buy the home of your dreams.
4. The cousin, and never had to fight to have good credit, he annoyed John and he stops talking, does not understand why John is more concerned about the bank by his cousin.
5. The friend, sorry, never talk to Juan and goes and keeps making the same mistakes with other friends.

Was it really good to share the credit?
No. The worst cases are those where a person with good credit applying for a mortgage to buy a house for a relative who has no credit. The relative lives in the house and repays the mortgage payments each month to their relative with good credit. When the person loses his job or decides not to keep paying the house, for that was that relative to good credit.

Good credit not be shared
It’s something that you yourself have to make have and have to cost you for that really values. When one receives something without spending, not value. And if they are willing to pay for it, you really deserve it? I think not.

But there are some cases where if it is good to share the credit?
Sure. If you have children under 21 years and want to have a credit card, the new law CARD ACT required to have a guarantor (unless they can show they earn enough money from your account to pay the card.) Being a guarantor in this case is a good idea.

Also in the case of persons spouses where one of us has good credit and the other has no credit. It’s okay to include your spouse as an authorized user on your account so you will establish good credit. From there you can request your own card.

A credit card is a payment tool that gives you access to a flexible source of credit. Compared with other ways to access a loan, credit cards are very convenient and you can choose from:

- How to borrow
- How to spend
- At what time the loan request
- What reinstatement fee each month, based on the minimum repayment level until the entire amount.

Who issues credit cards?

Credit cards are issued by banks and other financial organizations. Some businesses also work in partnership with banks to create their own credit cards. The credit card system itself is controlled by specialist organizations such as Visa and Master card. They say that billions of daily payments with credit cards reach the appropriate bank accounts!
What is the difference between a credit card my business card or a debit card?

A debit card is different from a credit card because everything you spend using it proceeds directly from your bank account. When you use your debit card are not asking for any loan, you only spend your own money electronically.

Businesses cards work the same way as credit cards but you can only use them in specific trades. Also, the interest of commercial cards is often higher than the credit card, so it can be an expensive way to borrow money.

What happens when I apply for credit card

Your application will be reviewed before a credit card company issuing your personal credit card. These reviews are conducted to verify your identity, prevent fraud and to ensure responsible lending. It is therefore important that all the information you provide is completely true and as accurate as possible. Some credit card companies can offer the appropriate card for you, and sometimes not. Your credit history is an important factor for the success of their application.
What amount of money I will be able to borrow with my credit card?

Once your credit card application has been accepted, the bank or company that issues the card will also decide the maximum amount you can borrow – your credit limit. This will depend on several factors, such as your salary, your current financial situation and credit history. Read the rest of this entry »

The word leverage is a term used mostly in finance or investments, the significance of this is lifted. This together with operational concerns all fixed costs that have a structure or company.

In better words, the operating leverage – leverage operational is a correspondence which is derived from the union of capital held by a company with credit invested in any financial activity.

Operating leverage – leverage operational occurs when the fixed costs of operation do not depend on it. To determine the operating leverage we just have to divide the profit growth rate between the rate of sales growth

Due to operating leverage – leverage operating companies can determine all the tools you have a company or business to perform the entire production process. Read the rest of this entry »