NoSoup

Credit History is exactly that - history. Although it will likely cost you around $215 in interest over the next 28 months or so, I would definately recommend just making your payments and keeping the term of the loan the same. It is a secured loan (the best type for your credit) and although the interest rate isn't phenomenal, it isn't bad. Additionally, it's only $2400, so it's an ideal way to build your credit.


It's up to you. Keep in mind that you never want it to go anywhere near your limit, so as long as you aren't charging over a maximum of $250 on it, you should be fine. If you do, try and raise the limit to double the maximum amount you will be spending in a given month. As far as implicatoins go, you'll get dinged slightly for having someone pull your credit report, but that's the nature of the game. Additionally, the ratio of money that you have borrowed vs availble credit will be lower, which is a good thing. I'd leave it alone at this point unless you are typically borrowing more than 50% of the limit, but if you are borrowing more, then increase it.

However, one thing to watch out for is payihg your charges off immediately online. Depending on how/when your credit card company reports, it may appear to the credit reporting agencies that you just simply have a $0 balance on your credit card. It would be better to charge anywhere from $1-$200 or so on it per month, then pay it off in full when you recieve your statement. You still won't be paying interest (most likely, check w/ your credit card company to be certain) and it will show activity on the card, as well as report with a balance.

The amount of money you set aside should be dependant on your expenses. I would suggest a minimum of three, preferably six months of expenses in your emergency fund, or at least $2500 - whichever is greater. However, every situation is unique, so if $1000 is good enough for you, it's good enough for me. It's unlikely that you have a financial institution nearby that will have a savings account with a decent rate for that amount of money, so I would suggest possibly setting up an account w/ ING Direct (www.ingdirect.com - I think the current rate is around 4.4% or so - which is about nine times the national average. Until you have your emergency fund set up with the amount you choose, I wouldn't recommend investing in anything that may potentially lose value. At least in my opinion, the ING account is idea for a variety of reasons - first of all, the relatively high interest rate. However, another benefit is that it takes a day or two to get the money transferred to your normal financial insitution. This should give you time to reconsider making some more expensive impulse buys, which seems to be the downfall of a lot of people's immediately accessible savings.

Once you have your emergency fund set up, you'll want to consider your options with what to do with additional savings. The key to answering this question is the length of time and the use it will be put towards, as well as how comfortable you are with risk. If you are definately going to need it next year for school, I would avoid staying away from accounts that may potentially lose value. However, if you think perhaps you'll use it in five years for a down payment on a house, you have a bit of time and may consider putting it into stocks (if you are saving regularly each month, I'd highly recommend a DRIP account) If this is money that you are going to save for retirement, a traditional or Roth IRA would likely be your best bet...

If I can be of any more help, let me know!

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