It’s becoming an all too familiar headline…
“Home Prices Fall for the 10th Straight Month” says the New York Times today.
It was this sentence in the article that gave me chills, “The quickening decline in home prices could hurt the broader economy by leading to more foreclosures as homeowners have more difficulty refinancing mortgages and by sapping consumer spending as Americans feel less wealthy.”
So I have a question for you:
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Do you feel less wealthy than you did last year?
Click the “Comments and Trackbacks” link below to leave a comment answering this question.
We’ll be granting a free year of Tight Money Millionaire Coaching to the best response.
Bountiful borrowing,
Donna Fox
I get so many emails from students of The Credit Millionaire System, from time to time I like to add them to my blog.
Although all emails that I receive are technically my property and can be used with permission, I do like to ask the author before I publish an email… it’s the nice thing to do.
In this case, Michael Flowers gave me full permission to print his comments to me. I thought they would be useful to you:
Hi Donna,
Were you aware Capital 1 increased rates in April to
many cardholders? This wasn’t a punitive measure,
they just brought the rate to 10.9%. We have a card
that enjoyed a 6.9% rate which was boosted. When I
called them, they said it happened to “everyone” and
would remain in effect for at least 6 months.After the 6 months, we called and they offered a 1%
reduction saying they “requested” we wait another 6
months before asking for another decrease. They did
say that periodically they could have a lower rate
available but we would have to call in to get it. So
you can get a 1% reduction now or MAYBE a larger one
later, just keep calling in.We did a no charge balance transfer to an account that
has an introductory rate of 0% until January 2009. I
wonder how many others are leaving Cap 1. I don’t have
them in my pocket now.Regards,
Michael Flowers
I’ve talked about this particular company before on this blog, and I don’t have them in my pocket either 
When it comes to your credit card needs, there are too many easy to find good companies out there to deal with ones that are making your life difficult. And while it’s within the credit card company’s right to increase your rates (after all, they decrease it without consulting you about it too… because it’s indexed to the T-bill usually), this tale just goes to show you that money is getting tight all around, for consumers and the credit card companies alike.
Consumer default rates are at an all-time high, and credit card companies are feeling the same pressure that mortgage companies started to feel a few months ago when the foreclosure rate decided to skyrocket.
Yes, it appears that the media dubbed “credit crunch” is in full swing.
What’s a Credit Millionaire to do?
Well, I’m working on it. I’ll get back to you in a few weeks about strategies for a tight money market.
Bountiful borrowing,
Donna Fox
During this holiday season, I think about all of the gifts that I’ve given and been given, and by far the best gift I received when I was a teenager was the boost to my personal credit when my mother added me as an authorized user to her accounts.
Unfortunately, the gift of good credit is has now gone the way of Christmas past. Like all good tools, when they get abused, it often ruins the opportunity for people who use the strategy legitimately, and that’s what’s happened this year.
Some credit repair organizations started using the authorized user strategy to sell better credit scores to consumers with credit problems, an activity that violates the Federal Credit Repair Organizations Act, FICO decided to change the rules. (I’m restraining from a sidebar about creating oversweeping changes that hurt legitimate people in an effort to stop illegal activity…grrr)
The new FICO scoring system will completely bypass any account where someone is listed as an authorized user. FICO expects the system to be fully in place early in 2008.
FICO expects that 30% of the population will receive a drop in their credit score when this change goes into effect. They also expect the move to disproportionally affect women, who are often added as authorized users to their spouse’s accounts.
And in typical FICO fashion… they are considering constructing the new system in the way that’s most damaging to consumers. These new accounts are completely bypassed for the purposes of positive scoring… but may be counted when the account has a negative impact. Hearing news like this bringing me back to my days as a pre-teen. I want to stomp my feet and say, “that’s not fair!”
That’s FICO.
How to get around this? Well, instead of being added as an authorized user, ask the cardholder to add you as a “Joint Account” holder instead. You will be responsible for payment, and good or bad credit history goes on your account. The only real difference is that the lender will likely check your credit before adding you as a joint account holder. If you have bad credit your application could be denied… or the interest rate on the account could be increased.
Bottom line, if you’re a Credit Millionaire or soon to be and are using the system available at www.credit-millionare.com then take the report and strategy called, “Give the gift of good credit” and change all the words “authorized user” to “joint account holder”.
It’s a higher level of commitment, so you don’t want to do this with people you aren’t close to.
If you’ve already been added as an authorized user to someone’s account to boost your score, apply for new credit now, so you can take advantage of the score boost, before the changes lower your credit score.
and as always, bountiful borrowing,
Donna Fox
