Buying second hand is growing in popularity these days. In fact, there are numerous very good reasons for buying second hand. In this blog post I will attempt to explain some of them. Of greatest importance is the fact that we are actually bordering on a global crisis that needs a permanent antidote not just a booster for a passing phase.
Discover the Apple Certified Refurbished promise from apple.com
Economy is one of the main reasons to buy second hand. Actually many people cannot afford to pay their bills and buy necessary things. As a result, second hand options can be a lifesaver as far as cost goes. For example refurbished products like computers are significantly less expensive than new ones. But the quality can be almost like new.
New cars specifically are known to lose thousands of dollars in value the moment they are driven off the lot. Thus economy is a great reason to buy a ‘previously owned’ product. In fact, in the movie Driving Miss Daisy, every time Jessica Tandy got a new car, her chauffer played by Morgan Freeman would purchase the car her son traded in for her new one.
Ecology is another reason to buy second hand. The United States for example is known for its garbage. Things are disposed of long before it is necessary. Quality items are needlessly replaced with the latest (often poorly produced) items. In fact there is so much garbage that the planet is choking with it.
Actually, there is almost nothing that man has made that cannot have a second life either in whole or in part. In other words, we are unnecessarily creating mountain of garbage and trash instead of practicing reduce-reuse-recycle.
Garbage: The Back End of the Renewable Economy from huffpost.com
The Production/Consumption Cycle
Ending the Over-Production/Over-Consumption Cycle Our economy runs on a very toxic system known as the production/consumption cycle. In other words people have to produce and people have to consume to keep our current economic cycle going. Unfortunately this system involves overproduction and overconsumption. Gluttony, too much garbage, and national debt are the result.
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New products may seem preferable, even justified conspicuous consumption. But are they worth it? In fact, they are often poorly made. The result may well be a flashy but short-lived ride to the garbage dump.
Both necessity and over-consumption may lead consumers into debt. Thus, we need to incorporate additional components into our current production/consumption cycle for economic solvency. One of these additions is called ‘buying second hand’. As a result, this can be part of a permanent cure, not just a temporary band aid to our current broken system.
Reduce, Reuse, Recycle-Inspire Health and Spirit from Inspire Health and Spirit.com
Challenges and Solutions There are items to buy second hand and other things to stay away from.
What to Buy Second Hand There are some great second hand suggestions from buying second hand from Best Second-Hand Deals on Buzzfeed.com.
Buying second hand from Best Second-Hand Deals on BuzzFeed.com
What Not to Buy Second Hand Stay away from non-perishable packaged and canned items with expired dates on them, the same with OTC medicine, etc.
7 Tips for Eco-Conscious Living Without Sacrificing Comfort and Style
On the whole though there is much more that does fit into the reduce, reuse, and recycle cycle. Therefore do everything possible to to participate in this system by buying second hand. As a result, it will help you and the planet.
Good Credit Card Hygiene is based upon several principles. They are the focus of and shall be reviewed in this blog post. Before any discussion can be held about extreme credit card benefits, one must have a firm grasp of the basic principles especially the components of your credit score.
Credit Score Chart Showing the Components of your Credit Score from TFD
The Components of Your Credit Score
To start with, it is very important to gain and maintain between a very good to excellent credit rating. Even if your credit is poor to start with, there are many resources, both nonprofit and professional that can help you to raise your credit or FICO® score. See the pie chart below for the breakdown of components.
Payment History
Payment history has top billing in the equation. It is crucial to always pay your monthly bills in full and on time. This is the first of the five components of your credit score and counts for 35% of the credit score algorhythm. You could say that it is the key player in good credit card hygiene.
Level of Debt
The next component that counts for 30% of your credit score is your level of debt. What this means is that the amount you owe or your monthly debt should not comprise more than 30% of the entire amount of credit that has been made available to you. If your total credit allocation is $100,000 then you should charge less than $30,000 each month. Actually, the most recent numbers I have heard, are that the credit reporting agencies are looking for a percentage of between 6-9%. This means that one’s monthly debt (credit card charges, loans, mortgage payments, etc.) should not exceed between $6,000 to $9,000.
Age of Credit
The first two factors make up 65% of your score so clearly they are the most important ones in obtaining and maintaining good credit card hygiene. Next is the age of your credit which makes up 15% of your score. Start applying for a credit card as early on as you can so that you will have a long credit history. In order to increase your chances of getting one, apply for a card for which you have been pre-approved. That way your credit score will not go down because of your application. Picking out a card that has not be pre approved will result in the reduction of your credit score whether you get the card or not. But it may not be a serious problem. You can still have good credit card hygiene and a decent FICO score.
Types of Debt and Credit Inquiries
Now you have 80% of your credit score accounted for. These are the three most important factors. But don’t ignore the others. It is good credit card hygiene and good for your score to have a mix of types of debt, credit card, loans, and/or mortgage. Here again, since this makes up only 10% of your score, it is not crucial. Likewise, credit inquiries also make up 10% of your score. So they are not crucial either.
What Is A Good Credit Score? From Experian.com
More About Good Credit Card Hygiene
There are numerous types of credit score systems, each with its own algorhythm. Two of the most popular systems are shown above FICO and Vantage. FICO® was created by the Fair Isaac Corporation. VantageScore is comprised of the input from these three reporting agencies, TransUnion, Equifax and Experian. They do not have the same exact rating scales but the difference is not far off. So let’s continue with the characteristics of good credit card hygiene.
Good Credit Card Hygiene Do’s and Do Not’s
Do not apply for too many cards in a short period of time. You will know that you are applying for too many in too short a time if you start getting rejections and that is the reason the credit card company gives for it.
Be mindful to not do anything that will result in negative comments on your credit report. If you do, these will reflect poorly on your credit score. This is not considered good credit card hygiene.
Check your credit card activity often and your credit scores regularly. Now that most, if not all credit card companies have this as a free feature, it is very easy to do. If you find any errors on your credit card, contact the company immediately. If you suspect fraud, contact the police as well as the credit reporting agencies. This can be very serious. Do this in a timely matter.
It is recommended not to close credit card accounts especially old ones. But if you must, wait until you have zero debt to do so. You don’t want to negatively affect you debt to available credit ratio.
15 Credit Card Do’s and Don’ts from Time.com
Conclusion
That’s about it for a review of what good credit card hygiene is. Once you have established a level of comfort and confidence with it, you can move on to the exciting part, Extreme Credit Card Benefits. That is the topic of the next blog post. I promise you will be WOWed by it.
