Think Twice Before Co-signing For Anything!Written by James Dimmitt
A few years ago a friend asked me to co-sign on an apartment lease for him. This friend didn’t have perfect credit and couldn’t get apartment without a co-signer on lease. He assured me that he was cleaning up his credit; in fact, manager of apartment told him he could resubmit his application and probably wouldn’t need a co-signer after first six months of lease.
He pleaded with me to help him this one time and promised me that nothing could go wrong. So, believing in my friend and that six months down road I could have my name taken off lease agreement, I took a chance and co-signed contract for my friend.
Three months later my friend lost his job, couldn’t afford his rent payments, and wound up moving back in with his parents. Complicating matters worse, my friend wound up owing additional fees for breaking his lease. When he couldn’t afford those fees, guess who management company came after? That’s right - his co-signer, me!
Convenience Can Be Costly - Understanding Cash AdvancesWritten by James Dimmitt
You’ve just opened your credit card bill and attached to your statement you find a “convenience check” included. It may already be filled out with a dollar amount such as $300, $500, or even $1,000. Your mind fills with ideas of what you could buy with this “instant” money. A new summer wardrobe, a nice dinner and tickets to a concert, a weekend getaway. But before you go off on a shopping spree, you should be aware that your “convenience check” is nothing more than a cash advance on your credit card. Cash advances on credit cards carry many extra fees, often overlooked or misunderstood by consumers.
Here’s a quick look at types of fees most card issuers charge for a cash advance:
1) Upfront fee of 2-4% of amount advanced. On a $1,000 cash advance your fee will range from $20-$40 in addition to interest charges.
2) Higher interest rate than on purchases. Many credit card companies charge 18% or more on cash advances. In addition, most companies apply only a small percentage of your monthly minimum payment toward cash advance.
Some require that you pay down balance on your purchases first before applying payments to higher-interest advance. In other words, you’ll be paying fees and interest on your cash advance for a long time, especially if you only pay minimum payment.