Category Archives: credit card payments

Talk, Don’t Balk – What to do If You Can’t Make Your Credit Card Payments

Posted on April 17, 2012 by admin

Most of us have been there one time or another – an emergency cleans out your bank account, or you encounter a brief period of financial stress or maybe you just spent too much one month. If this temporary setback prevents you from making your monthly credit card payments, the last thing you should do is simply let the bill go unpaid. The credit card company can take any of a number of actions; they can charge you a late fee, they can raise your interest rate and they can report these actions to credit bureaus that could negatively affect your credit score. What you do is call the financial institution or store that issued your credit card and explain to them that this is a single occurrence and tell them when you will be making your payment. Frequently, companies will change your due date, waive the late fee and report you as “current” to the credit bureaus. Not every creditor will be helpful. If this occurs, see if you squeeze the minimum payment from somewhere else in your budget – perhaps you can spend less on entertainment or clothing. If not, maybe a family member or friend can help or you can get a small advance on from work against your next paycheck. Caution is the watchword if you put off paying other monthly bills, as there can be very unpleasant consequences. If you fail to pay the electric bill, your service could be turned off. Do not get a payday loan – usually they lead to an ever-increasing spiral of debt at extraordinarily high interest rates. If you find that each month you have difficulty paying more than your minimum payments, you may want to see a credit counselor. Together you can figure out a new budget or work with your creditors to lower your monthly payments. To avoid late fees and other penalties you must either pay your credit card’s minimum balance due or contact them to make other arrangements. A partial payment is not good enough to protect you from fees and interest rate hikes. Keeping your creditors advised of why your payment will be late and when you will make it often receives a sympathetic ear, and additional fees and negative actions are prevented. However, the creditor is under no obligation to do this and usually only extends this type of courtesy once. Do everything in your power to pay your bills on time in order to preserve a good credit rating. Continue reading →

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Credit Card Transparency

Posted on March 12, 2012 by admin

On December 7, 2011 the Consumer Financial Protection Bureau ( CFPB ) announced that the way credit card agreements are laid out and presented to the consumer will be changing.  The third phase of the Know Before You Owe campaign is directed at improving credit card transparency by simplifying the agreements credit card users must sign.  The card issuers must be more transparent with their new agreements, showing all the terms and conditions in an easy to read format. The CFPB started in 2010 and is dedicated to a more open government.  By making financial matters easier to understand, the CFPB aims to give more power to the consumer rather than big corporations.  The Bureau recently launched a three part series that started with Mortgages , moved on to student loans , and is now giving the power to consumers with credit cards. The US population is estimated at about 300 million residents.  There are currently over 500 million credit cards in use, the debt on those cards is over $700 Billion, or roughly the same amount as President Obama’s initial stimulus package.  The goal of the Know Before You Owe campaign is to help reduce this amount by informing consumers what they are getting into before they start using a credit card. In order to increase consumer knowledge when it comes to credit cards, there are several changes being made.  Credit card agreements are long and difficult to read.  They currently average around 5,000 words, much of which is legal jargon hard to decipher by most credit card users.  Buried in this jargon are the key terms, interest rates, and other important information that the consumer should know.  Unfortunately the agreements are written in a way that causes the consumer to pass over it all, and just sign on the line.  The new agreements will have all the important information on the first page in an easy-to-read format, and be nearly 5 times shorter with an average word count of 1,100 words.  See the simplified prototype for what it may look like in the future. One of the worst feelings is the one that hits when you know that you have been scammed.  Even worse is when the person or company that tricked you did it legally.  While the companies issuing the credit cards most likely did not set out to trick their customers, the end result was many felt cheated.  For those who feel they have been cheated, the CFPB has an easy to use credit card complaint feature .  With the new credit card regulations, this feature will hopefully go unused, but until the new agreements start to roll out, you can preview the new agreements, and give feedback to the CFPB . Continue reading →

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Smart Money Move #1 – Review Your Credit Reports

Posted on February 16, 2012 by admin

Your credit score is one of the most important measures of your financial health. Your credit score, or FICO score as it is sometimes called, tells lenders how credit-worthy you are and whether they should lend to you.  A good credit score allows you to get better loan rates and to borrow money when you need it, while a low score can make it difficult, impossible or very expensive to obtain a credit card, car loan, mortgage or other financing.  Because a credit score plays such an important role in your financial life, you should read and review your credit reports at least once a year. Why You Need to Monitor Your Credit Reports You need to be aware of whether your credit score is going up or down.  Your credit score will be affected by a number of different things you do.  Closing old accounts will cause your score to drop lower since you will lower the amount of credit available to you.  On the other hand, paying off debt will cause your score to go up since you’ll free up more credit and have evidence of on-time payments to show lenders. Knowing how the actions you take affects your credit can help you to make more informed decisions about smart money moves.  If you are going in the right direction and see an improvement in your score, this can also help you to stay motivated and on track with your financial improvement plan. Avoiding Identity Theft and Other Problems Another reason you need to monitor your credit score is that a change can indicate a problem with your credit report.  A sudden shift downward in your credit score can, for instance, indicate that either an error has been made and that negative information is being reported or that someone has stolen your identity. When your score declines for no reason and you have not done anything differently, it is time to order a free copy of your credit report to find out what made your score go down.  If you see new accounts you didn’t open, this lets you know that the cause of the drop in your score was identity theft.  You can then take action to let your creditors and law enforcement know and to stop the damage to your credit history.  If it is inaccurate information on your credit report causing your score to go down,  then you can dispute the inaccuracies and have them removed. By reviewing your credit reports, you’re protecting your credit score, and your ability to get a credit card, finance a car purchase and even obtain a mortgage for your home. Continue reading →

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