Vijaibabu's Blog - Personal Finance Guide for Financial Freedom

Commandment One: Pay all credit card bills on due date in full In case you do not pay the entire bill amount on the due date, interest is charged from the date of spending, and not the due date for payment. That factor alone can push up credit rates to over 40% per annum; and this makes it probably the most expensive form of credit. Kill the credit with a personal loan if required -- and follow the discipline of no more rollover of credit henceforth. Commandment Two: Close all unnecessary bank accounts How many of us open new bank accounts with each new job, and haven’t even checked the balance in the dormant ones in the past one year? Commandment Three: Keep a maximum of one month’s expenses in the bank account As you may have realized, the bank pays interest on your savings bank account at a rate lower than that of inflation. That’s not to say that the rest needs to be invested for the long-term: I am only stating that you can earn a bit more through fixed deposits or sh

Do not open new accounts rapidly:  Opening new accounts frequently attracts suspicion.  Do not frequently close unused accounts:  Longer lines of credit always positively impact creditworthiness.  Responsibly maintain credit cards:  Credit card payments must be made on time. Do not obtain additional credit cards to increase available credit. Do not make enquiries when unsure of borrowing.  Pay down debt and on time:  It is extremely important to pay down debt, and do so on time. Customers believe that moving balance equates to paying off debt. On the contrary, moving balances need to be settled in a timely fashion to maintain good credit behavior.  Frequently check credit reports:  It is important to frequently check credit reports to remain informed about discrepancies. Rebuilding credit history is a slow and patient process. Given the advanced practices adopted by banks in lending decision making, it is important, as a customer, to remain informed and consistently monitor credit