MoneyTalksNews asked:

If you carry a balance on one or more credit cards, you’re not alone: according to the Federal Reserve, nearly half of American families do. And nearly half of American families also have some sort of bank savings accounts. If you have savings, should you use that money to pay off your credit cards?

Charles

Mike Samadi asked:


(Copyrighted)

As the stock – the housing – or the financial market are causing emotional rage among people and no one actually knows what should be done, let’s see if you can take handle of your credit, financing and money a little better.

The stock, bond and financial market are going crazy.  The DOW closes down about 600 points in a week and NASDAQ follows.  The giant banks such as Citi Bank (Citi-Group) goes from $48.00 per share to less than $18.00 per share in a matter of 60 days (a change whether up or down- never seen before in the company’s history), losing over $120 Billion dollars in value.  Similarly falls take place for Bank of America, Washington Mutual and one of the largest home lender’s (Countrywide-now owned by Bank of America) stocks.  Countrywide stock goes from $45.00 per share to a little over $5.00 per share in a matter of a few months (an action never seen before), these are all clear indication that there is something wrong with the market and economy.

Such banks and lenders don’t fall in such way so quickly unless something big is wrong.  Of course, it was all because of the Government giving the banks all the rope they needed to hang themselves by REQUIRING them to lend money to everyone with any type of credit rating (score).  Meaning, the government did not regulate nor set policies for the banks to limit their lending to people who have bad credit.  As a result, all those who had bad credit, are defaulting on their loans and causing even some of those with good credit to suffer as well.  However, this was NOT the only reason in banks’ failures.  The banks also made the loans attractive for a lot of people for the first few years, by offering low ARMS rate (read all about it in Your Credit = Your Life book.  EBOOK also available).   The Government wasn’t accepting the fact and had put its blind eyes.  Finally, the Federal Reserve is realizing the problem and is continuing to reduce interest rate hoping that the economy and all the sad financial companies’ news would go away and things get back to normal.  Not the way Fed is doing it.  (read the article about “How will the new Federal Reserve Bank interest rate cut affect MOST consumers in about a year or two.!??“

What do all of these mean to you?

BRIEF

As the price of Gas and Oil goes up, the retail stores that have to transport their goods to the stores (making the them available to you), have to raise prices, cut corners and lay off workers in order to cut cost and control expenditure in order to stay profitable.  The same goes for almost every other consumer product provider.

As a result of all these changes in the economy and corporate losses, you and I are effected.  Therefore, you must understand your financial environment and make certain that you do NOT get affected directly and quickly.  This means you need to get a grip over your money and finances. 

Your Credit and Financing

You have two options.

If your credit is good:

If your credit is “B” or better (credit score of 740-750 or better), do NOT get excited – do NOT start spending money now.  Because, until the dust in the stock market settles and/or the price of OIL/GAS come down (if ever), you need to keep the good credit so that you can use it for investment in areas such as “REAL ESTATE”, and other properties that have been taken away from their previous owners and will be sold CHEAP (cars, boats, planes…).  Or use your money and buy some of the CHEAP stocks (Citi- “C”,  Freddie Mac- “FRE”, etc.).  However, I do NOT suggest borrowing money to buy stocks.  I am NOT giving stock analysis or advice.  Do your research.  The market will continue going down until March or April 2009.  Please look for my next article called:  “What do I think the first quarter of 2009 will bring. What type of economy will we face.” 

If your credit is NOT good:

Now it is the time to fix your credit and take control of your financing.  I can not emphasize enough the importance of good credit.  You are suffering because of your bad credit. Your interest rate on almost everything (if not everything) is high because of your credit.  Why are you paying more than you should to your creditors?

I wish to see you succeed.

Best of luck,

Mike Samadi

Any questions?  Go to Q & A of http://www.MasterCreditRepair.net, read and post.  Go to the “Comment” page and post your story or comment.  Your personal information will remain confidential.  Joint my membership club (coming soon).



Cheryl