Here are some Q&A that Ellie recently answered on ABC NEWS, Good Money Show.
Q. I’m single and my landlord recently raised my rent, plus the costs of others things are rising while my income stays the same. I’m having a harder and harder time paying bills and I don’t’ have a mortgage to refinance, would it be worth it to refinance my car? Joellen - WA
Ellie: Yes, most people don’t realize that you can refi an auto loan, but you need to be prudent! First, go check out some of the best rates that are being offered and that your credit score would allow you to qualify for by going to monitorBankRates.com or bankrate.com where rates vary from 3.99% to over 12%. Take the best rate and plug it into my auto loan calculator at elliekay.com to see how much you would save with a refinance. Sometimes, you’re offered a longer loan at a higher interest rate but the monthly payments are lower because you’re paying longer. I’ve also noticed that Wells Fargo will finance a car for 125% of its value—run from that deal as you’re guaranteed to owe lots more than the car is worth as soon as you sign the paperwork and your car will only continue to decrease in value. This is not a good deal for you as you’ll pay more over the long run.
Q. Should I pay my department store credit card first or my Visa credit card bill first—I don’t think I can pay the minimums on both of these this month because I just got my hours cut in half at work! Robin Hilldale, Tehachapi, CA
Ellie: Generally speaking bank cards such as American Express, Visa, Mastercard or Discover are the accounts that carry more weight on your credit report. A department store credit card does little to improve your credit rating, but that’s not to say that you can let this debt go bad because it will be turned over to collections and it will hurt your credit score. But if you can only pay one on time and have to pay the other late, then go with the Visa and even if you pay less than the minimum, try to pay something on the department store card.
Q. My husband was injured in an automobile accident and not only do we have a mountain of medical bills, he can’t work until he’s recovered from his accident. We can’t really afford to pay for financial counseling, is there some place we could go for help? Justine - Ohio
Ellie: Justine, I’m sorry to hear of your situation, it must be very difficult. But I do have some good news, you are a prime candidate for Consumer Credit Counseling Services. Go to nfcc.org to find a credit counselor in your area who will work with you for free. In some cases they are able to get some of your medical debt forgiven and in many other cases, they are able to get interest rates lowered. But beware, there are a lot of “for profit” counseling services out there that masquerade as “non profit” and you need to be sure to only go to nfcc.org .
Q. I was laid off from work last year, but I’m really happy to report they called me back to work this past month. However, our bills took a hit as we were trying to make ends meet. My credit score is now a paltry 590. What can I do to try and repair it? Heidi Rothenberg, New York
Ellie: Communication with creditors is the key when it comes to going through the rough patch that you just survived. If they know you are trying to be responsible and pay off your bills, they can, in some cases, lower the minimum payment or extend the loan (depending on the kind of debt you have). The three quickest ways to improve your credit are: 1) pay more than the minimum payment due on your credit cards—even if it’s just $5 over the minimum, it shows up on paper as you paying down debt 2) make payments on time – better a day early rather than a day late and 3) pay attention to the proportionality on your credit card accounts and make sure that you only have 50% or less of the available credit charged on any one card. Go to annualcreditreport.com to get a free copy of your credit report and you can see which accounts need the most attention.
Q. My problem isn’t that I’m not paying my bills, it’s that my estranged husband isn’t paying the credit card that is in both of our names. What can I do to protect myself in the case of his unpaid bills that also impact my credit? Stephanie, AZ
Ellie: Any joint accounts set up in both your names will continue to impact your credit score, even after a divorce. So it’s important, no it’s critical, to your financial health that you separate these accounts by setting up new account numbers. For example, you could ask your spouse to get a loan from your credit union to pay off the balance of the joint account. Or, you could propose that he could go to bankrate.com and find a card offering better rates, including transferred balances. In that case, it’s a win/win situation because he gets a lower interest rate through an introductory offer and once the balance is transferred, you can both shut down the joint account.
Q. Ellie, I’ve read all your books and they have really changed our lives! We ran into some trouble when our credit card company suddenly changed the due date on us and we were late on our payment. I thought they weren’t suppose to do that anymore because of the Credit Card ACT reform. Should I watch out for this with my other credit card companies in the future? Chris from New Mexico
Ellie: Yes, you and millions of others had the same problem with changed due dates that suddenly made you late on a credit card bill. But those days are suppose to be a thing of the pass with the Credit Card Accountability, Responsibility and Disclosure Act or the CARD act that has been implemented throughout the latter part of 2009 and into 2010. Now, credit card companies are suppose to give you 45 days notice for any significant changes on your account, including your due dates as well as increased fees and higher APRS
Q. Our problem is that we seem to be perpetually late on paying our bills—because we’re so busy that the bills creep up on us before we can send the check in on time. Is there something you can suggest to help us avoid being late on our bills? Hannah Ortega, Texas
Ellie: Yes, this is a problem isn’t it? In our house, I’ve asked my husband to be in charge of the bills because even though I'm the "financial expert," I felt it was important for him to be keenly aware of how much we’re spending and where it goes. But that meant that I had to oftentimes deal with the frustration of seeing bills paid late until technology came to our rescue and the advent of online bill paying came into existence. We pay all our bills online including the mortgage, credit cards, electric bill, etc and we’ve set these up for an automatic draft on our checking account on the day they are due. The only bill we haven’t been able to pay online is our water bill because our city is a little behind the times and doesn’t allow that for now. However, since we’ve set up automatic pay online, we’ve never been late on a bill again!
Ellie Kay
America's Family Financial Expert (R)
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