Thursday, July 10, 2008

Credit Card Question

A friend of mine was considering opening up a new credit card in order to pick up a 5% discount on gas. It seems like everything these days comes with a gas incentive, but that's beside the point. His question was on whether or not it was a good idea to open a new card. He's 24 years old, has no credit card debt but several cards, and will likely be buying a house in the next two years but probably not in the next six months.

It is generally a bad idea to open a new credit card if you are planning a major purchase such as a car or house in the next 18 months. Also, you should try to keep the number of cards you have to a minimum. Most sources recommend no more than three cards. That said, you don't need to close the major credit cards you already have, but try to remember and use them all once every six months to keep them current. You definitely don't want any cards which have an annual fee. As far as rewards go, I prefer the cashback versus the points system. I'd rather get a guaranteed 5% back on gas than earn points which are impossible to redeem.

Although not necessarily part of getting a new card, it is always a good idea to know what's on your credit report. I'm not advocating those "services" which give you a monthly update, but you should take advantage of the free report you can get three times per year (make sure you alternate reporting agencies). Visit to get your credit report. This is the official site for getting your credit report.

Sources: Military One Source , Army Times
(It's only a coincidence that they are both military)

Tuesday, July 1, 2008

Housing Market Affects Stock Market

The AJC has a couple of articles on Home Depot (an Atlanta-based company) this week. Home Depot is at their lowest price since January of 2003 and has dropped from the second largest retailer to the third. Obviously, the housing market is being blamed for the loss in the company's momentum. Normally, Home Depot is touted as a solid company with great growth. I'm planning on buying a house in the next year and I'm glad the timing will work out to where I will be getting in at a low point in the market, but another way you can take advantage of the drop in the housing market is by buying housing dependent stocks. Home Depot and Lowe's are two obvious examples. I am sure there are lots of other companies that are based on the housing market. Perhaps a tile or lumber company. Maybe a company that specializes in home fixtures or appliances. Perhaps even a realty company. What companies do you think will be bargains as a result of the downturn in the housing market?