More and more college students are graduating with credit card debt every year. We are working to limit the marketing credit card companies can do on campus and also to provide better credit management information. Here are some important guidelines.
10 Tips to Avoid Credit Card Trouble
1. Shop around before accepting a credit card offer: Terms and conditions vary widely, so it's important to compare offers–for example, regular APRs range from 7.99% to 30.25%. Key fees and terms to compare:
- Regular (non-introductory) APR: look for APRs near or below 15.04%
- Grace period: at least 25 days
- Late payment fee: no higher than $20
- Annual fee: look for cards with no annual fee (most do not have annual fees)
- Penalty APR: look for cards that don't assess penalty APRs, or if unavoidable, penalty APRs no higher than 20% and in place for a limited period of time only (for example, until two consecutive payments are made on time)
2. Read the fine print: Read disclosure charts and surrounding text carefully and thoroughly before accepting a card. Many punitive fees are stated only in the fine print below the disclosure chart.
3. Carry only one or two major credit cards, and avoid using the full available credit line. Remember that credit card purchases are more expensive than cash or check purchases once interest and other fees are included. Use credit cards sparingly and wisely.
4. Pay off all balances in full every billing period, or pay as large a portion of the remaining balance as possible, making the largest payments toward the card with the highest interest rate. Always pay more than the minimum, if possible!
5. Reduce the number of direct mail credit card solicitations you receive by calling 1-888-5-OPTOUT. This will remove your name from pre-screening lists at the three major credit bureaus.
6. Seek credit counseling as soon as financial problems arise. To locate a free or low-cost credit counseling agency near you, call 1-800-388-2227 or visit www.nfcc.org. For one-on-one counseling over the phone, call 1-800-680-DEBT, or visit www.myvesta.org on the Internet.
7. If you believe you are the victim of unfair interest rate charges, late fees or other penalties, or deceptive marketing, and the credit card company fails to address your complaint, file complaints with your state Attorney General's office and the national Office of the Comptroller of the Currency: E-mail: Customer.Assistance@occ.treas.gov, fax: 1-713-336-4301, or by mail: Customer Assistance Group 1301 McKinney Street, Suite 3710 Houston, Texas 77010
8. Know your financial means and limitations, and don't spend beyond your means. Create a budget that takes into account your average credit card payments each month, and stick to it.
9. Free Credit Reports from One Source: Consumers can get a free copy of their credit reports once every 12 months from the three major national credit bureaus (Experian, Equifax and Trans Union) - visit www.annualcreditreport.com; or call 877-322-8228, or write Annual Credit Report Request Service, P.O. Box 105281, Atlanta, GA 30348-5281.
10. Look out for Errors: When you get a copy of your report, review it carefully for errors. According to a recent PIRG study, one in four credit reports surveyed contained serious errors that could result in the denial of credit, employment, or insurance. If you find inaccurate information, dispute it with both the credit bureau and the person or company that provided the information to the credit bureau. Visit: www.occ.treas.gov/customer.htm or call: 1-800-613-6743, (M-F 9am-3:30pm CST)
How to Get a Copy of Your Credit Report
It’s important to check your credit report at least once per year for errors. Your credit report and credit score can determine whether you qualify for insurance or loans, the price you pay for credit, and can even impact your ability to get a job.
How to Dispute Errors
Once you have notified the credit bureau of any mistakes in your report, the bureau will have 45 days to investigate the disputed items if you obtained a free annual copy of your report from the new centralized source; it will have 30 days to investigate in all other cases, but may extend this time period to 45 days if it later receives additional information from you that is relevant to the investigation. The credit bureau must remove any disputed information that is found to be inaccurate, incomplete, or unverified, and provide you with an updated copy of your credit report. At your request, the credit bureau must notify any persons who recently have obtained your credit report that the information has been removed. If you disagree with the results of the credit bureau's investigation, you have the right to include a written statement of the dispute in your credit report. In addition to these rights, you may also dispute the item directly with the person or entity that provided the information to the credit bureau.
For more information on credit cards, visitwww.truthaboutcredit.org.
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