Thursday, December 25, 2008

Keeping Watch on Credit Card Fees Could Save You Money

Credit card users who haven't bothered to read the fine print in their cardmember agreements could be paying more than they expect, should they incur a late payment fee.

Credit card issuers occasionally update their rates, fees, and penalties, so it requires ongoing diligence to stay informed. Disclosures that were a single page one decade ago now can total 20 pages, on average. Late fees, while hardly new, have increased markedly since the mid-1990s to about $30 on average, and often reach up to $39.

At the same time, other types of credit card fees are important to consider. balance transfer fees are fairly common, which generally amount to about 3% of the transfer amount. The good news is that most credit card issuers cap balance transfer fees at $75, which can make transferring a large balance considerably less painful.

Looking ahead, some credit card issuers are considering a fee for cardholders who pay off their balance in full each month, according to experts. This is because so called "transactors" are unprofitable for most issuers. Additionally, some card issuers are considering interest rate increases automatically triggered by a credit rating decline, even if cardholders make payments on time.

What is a credit card user to do? First on the agenda is a yearly review of their credit cards, especially each card's APR. Find out the reason for rates above 14% by calling the credit card issuer. Be on the lookout for recurring fees. Although the card may have initially been a no fee credit card, a fee could have been added on at some point. Beware of fees for exceeding the card's credit limit and for making payments by phone.

Once fees have been identified, ask the card issuer to have them removed. A good customer may be able to get them reversed one or perhaps even two times. Also be sure to make at least the minimum payment well before the due date if you're not able to pay the balance in full.

While staying on top of credit card fees is not easy, it is worth the trouble in order to save your hard earned money.

Tuesday, December 23, 2008

Let Credit Cards Work Together to Save You Money

With credit cards providing all sorts of benefits, choosy consumers can get a lot of mileage from having a decent assortment of plastic. Issuers are creating credit cards that target different categories of users, enabling smart consumers to apply for a number of credit cards and only use each credit card in a way that provides the maximum benefit.

However, this approach should not be taken by consumers who have trouble paying off their credit card balances each month, paying on time, or who have damaged credit histories. Those individuals who do better to limit the number of credit cards they hold.

To start, consumers should learn about the variety of available credit card options by visiting websites like When considering rewards credit cards, shoppers can drill down into the terms and conditions of the reward plan to find out such things as when the plan expires and if there is an annual limit to the amount of rewards they can earn.

Consumers may want to evaluate their own household needs, picking three to five credit cards that will help the family the most. Perhaps the family could use a cash back credit card, a gasoline credit card, and an airline credit card. Should both members of a married couple each have good credit scores, the husband and wife can separate their card applications, allowing them to take advantage of new deals from issuers who may have already signed up one spouse but not the other.

Consumers can select a main credit card that provides an appealing rebate, making any transactions with this card that do not fall into another category they have a card for.

Perhaps you will decide to use a credit card that provides 0% interest for one year on balance transfers or cash advances. Consumers should call their card issuer to find out the date the balance must be repaid by to avoid any interest charges, marking this date on their calendar. They may then decide to put this credit card aside and not use it for any purchases until the balance has been paid off. Check to see if the card charges fees for balance transfers.

Meanwhile, they can choose a credit card that offers benefits at places they spend a lot of money, such as home improvement stores or at restaurants.

After a year using their selection of credit cards, consumers may want to add up the total of how much they have earned and saved by using the right card at the right time. With card issuers often retooling rewards programs, consumers may also want to review the terms for the plastic they are carrying and decide if they would do better to make some swaps for cards that would provide greater benefits.

When juggling multiple credit cards, it is very important to keep up with payments so you don't get slammed with penalty fees and charges. Online bill payments can help, with consumers making sure they send an automatic payment to each credit card issuer before the payment's due date.

Monday, December 22, 2008

Credit Card Information at Risk When Throwing Away an Old Computer

With the rapid pace of technological innovation today, the computer you just bought a year ago may already seem outdated. So it's likely you regularly buy a new one. But what to do with the "old" computer? While there a number of options for getting rid of a PC, simply throwing away your computer may be the worst idea, as it can provide a danger to the environment and public health, as well as to sensitive personal data, including your credit card information.

Your computer, like most electronic devices, contains mercury, cadmium, and other hazardous materials. These substances can be hazardous if dumped in a landfill. As a result, it is worthwhile to investigate ways to safely recycle or dispose of your PC.

Your credit card information is also as risk when you simply throw a computer into the trash. If you have made Internet purchases on your PC, or perhaps saved budgeting information to your hard drive, sensitive credit card and financial information could be on your computer. Even if you erased files by throwing them into the computer's Recycle Bin, they can still exist on your hard drive.

There is good reason to be concerned about who could get ahold of the information on your old computer. Banking information and credit card details taken from the hard drives of computers that were recycled or put on the used market have been sold in places as far away as Nigeria. Whoever buys the discarded computers can recover data from unerased hard drives, making your credit card information a dangerous tool in the hands of identity thieves.

As a result, smart computer users should take precautions when they throw away their PCs, just as they would with any credit card statements or other paperwork that contains sensitive card information. One way to erase credit card and other information from your hard drive is through the use of commercial software that acts as a digital file shredder by overwriting files and making them not recoverable.

Or, you can literally smash your hard drive. First, you can remove panels from your computer to get at the hard drive. Then, take off the top and use a hammer to destroy the hard drive.

Still, an old computer does not need to be thrown away. An older computer can function as a dedicated file server in a small office or home network, or can be a reliable backup should anything (virus, theft, damage, etc.) happen to your new PC. If you have wiped your computer clean with the type of software described above, you may want to sell the computer, or donate it to a charitable organization (earning yourself a tax deduction in the process). For those consumers looking to recycle a PC, take a look at the webpage of the National Recycling Coalition's Electronics Recycling Initiative:

Remember that while an old computer may simply be trash to you, it could be a potential goldmine for those looking to commit identity theft.

Friday, December 19, 2008

Protect Your Credit Card From the Latest Identity Theft Techniques

Most credit card users are aware that they need to be wary of identity thieves who would like nothing better than to gain the card number from an unsuspecting consumer. So while consumers should continue to be wary about giving out their credit card information in person, by phone, or over the Internet to anyone who they don't know, there are some other things to also look out for.

Many sandwich shops offer coupons for a free sub. Some thieves have taken to buying up a number of these coupons, and then picking up a similar number of credit card applications. These criminals will go to a shopping mall or other highly-trafficked area and ask people to sign up for a credit card to get a free sandwich. Once the person has filled out the application, the thief has all their personal information, including a social security number. To an identity thief, this information is much more valuable than the cost of a hoagie.

To avoid becoming a victim of this scam, consumers can apply for credit cards online at secure Websites like

Another way identity thieves are getting at credit card information is through the use of that popular piece of technology, the camera phone. As the cardholder goes to use their plastic at an ATM or somewhere else the card number is publicly visible, the nearby thief snaps a photo.

Cardholders using an ATM or taking their credit card out in public should notice if anyone nearby has a camera phone at the ready or appears to be getting a look at the card number. Consumers should try and keep the actual card number obscured by their hand when they take it out from a wallet.

Make an identity thief's life tougher by always thinking about ways to protect your credit card information and taking the necessary precautions.

Thursday, December 18, 2008

Credit Cards Provide a Safety Net for Cash-Strapped Consumers

Many people live beyond their means. But for cash-strapped consumers simply looking to get by, credit cards act as a safety net, helping them to make ends meet during tough financial times.

Not everyone who carries a credit card debt is a spendthrift. While some cardholders certainly are compulsive shoppers or buyers with little self-control, this is not always the case. A degree of the massive debt in this country can be attributed to Americans who simply lack the necessary savings to get out a jam. As a result, borrowing money is their only choice when times are hard.

Many Americans, from the middle class on down, find that basic necessities become tougher to pay for each year. With an already-tight budget, the events that can force a consumer to run up credit card debt are by no means unusual.

The cost of medical care can be a huge burden, with many necessary procedures or treatments falling beyond the monetary means of the average person. Likewise, with many U.S. companies scaling back operations or moving them overseas, layoffs are a constant threat to the American worker. Without their main source of income, the unemployed may turn to a credit card as their sole access to funds. Meanwhile, the sky-high divorce rate in the U.S. produces not just broken homes, but difficult financial situations for people accustomed to making ends meet on a combined income.

The critics who charge that the American public are unable to live within their means and are simply too willing to rack up unnecessary debt on credit cards should consider these factors. Challenges like medical costs, job loss, and divorce can leave consumers with little choice but to use their credit card for staples like food, gas, and clothing.

For those consumers who need a credit card to get out of a jam, consider a credit card that offers a low interest rate. That way, when financial pressures do ease up, it will be easier to pay back any outstanding balance on the card.

Wednesday, December 17, 2008

Protect Yourself From Credit Card

By now, most savvy credit card users know to carefully review their bill each month for any unauthorized charges. Scrutinizing you credit card statement for unusual activity can alert you to the activities of fraudsters who have improperly gotten hold of your account information, since even the most careful consumers may have their financial information stolen.

One way thieves are trying to sneak unauthorized charges past credit card users is through the use of smaller transactions. Realizing that major charges will jump out when cardholders examine their credit card bill, thieves hope that lesser amounts (particularly when they appear on lengthy statements) will sneak past the eyes of watchful consumers.

A single thief may place these small unauthorized charges, which some people have labeled "spam charges," on the credit cards of hundreds of different people. While a single major charge in the hundreds of dollars may stand out on a credit card bill, consumers may simply be able to write off a smaller transaction, perhaps deciding it was something a spouse or another family member put on the card.

To prevent spam charges, consumers should take all the usual precautions, including only shopping online at secure websites that begin their addresses with "https" as opposed to "http." When using Microsoft's Internet Explorer, users should look for a small yellow padlock icon in a shaded bar near the bottom of the screen. By double clicking on the padlock, surfers will bring up the site's security certificate, which they should check to make sure it hasn't expired and that the name on the certificate matches the name of the company the purchase is being made from.

Additionally, some experts recommend having one credit card that is used only for online shopping, instead of paying with all your different credit cards on the Internet. When shopping for a credit card for online use, consider the range of options available at, such as low interest, rewards, and cash back credit cards. By using just one card online, consumers will be able to make easily keep track of spending and notice any unusual transactions.

Separately, Internet users can secure their home computers against viruses or by using a spyware detector such as Ad-Aware or SpyBot, which both offer free downloads.

If consumers discover unauthorized charges on their credit card statements, they should be sure to inform their card issuer. Cardholders are not responsible for unauthorized charges -- provided they are promptly brought to the attention of the credit card company.

While it may not be clear how thieves gained access to credit card information, that does not mean consumers should stop using their plastic when buying items online. Credit cards often are a better choice for Web purchases than other payment methods since they provide legal rights, including the ability to dispute payments. Certain credit cards also offer protection such as insurance or extended warranties.

Tuesday, December 16, 2008

Googling Your Name Can Turn Up Credit Card Data

It's a popular diversion: type your name (or a friend's name) into an Internet search engine like Google and see what results pop up. Occasionally, the search results may contain something you wish wasn't publicly available, like your credit card number. With no hacking required, a simple Google search could turn up your credit card number, along with your name and address.

Often, credit card and other data may appear on the Internet as a result of identity theft, and the criminals who traffic in stolen identities for their own illegal gain. These identity thieves are able to snatch cardholder information from online businesses that take credit card orders but do not employ proper security measures to protect customer information from hackers.

Identity thieves then traffic in your personal data, attempting to buy or sell it online, along with thousands of others. They may sell information that includes a debit card PIN and credit card numbers, Social Security number, home phone number, e-mail address and password, and a mother's maiden name -- enough information for a multi-year identity theft outing. Your data could crop up on a Website established for just such a purpose, although, more often, stolen credit card information is traded behind closed doors in Internet chat rooms where information is more difficult to trace.

Criminals may post stolen credit card and other personal information online for a number of reasons. They may want to provide a sample of the information they are looking to sell, allowing others to test the goods to prove they are valid before making a purchase. Or, the thief may be seeking to make it more difficult for law enforcement to trace illegal use of the credit card back to him -- muddying the waters by allowing others to get hold of the data which they too can use to make charges. Additionally, the thief may be trying to simply improve his status in the underground community.

Administrators who run the chat rooms where credit card and other personal data is traded have the ability to kick people out of the room and set passwords, in addition to loading programs onto the page which enable online criminals to check the authenticity of stolen credit card data in real time. Administrators can use hacked merchant credit card accounts to verify the information before posting it in the room. Generally they do not actually charge the credit card, instead running authorization transactions, which do not cost the cardholder anything but confirm whether a specific card is usable. The merchant is charged the minimum transaction fee (generally about $0.10), and the consumer remains unaware their credit card account is about to be compromised.

To prevent your credit card information from becoming another items floating along the information superhighway, be wary of fraudsters employing phishing scams or other techniques that try and get you to reveal personal information. The credit card data that shows up through an online search may have been derived from a phishing scheme. Separately, be sure that you only conduct online transactions through secured websites, with Internet addresses that begin "https" and often display a lock icon.

If searching Google for your name does produce a result containing your credit card number, you can take action. Cancel the credit card, look over statements from your other credit cards for unusual transactions, and get a copy of your credit report from each of the three national credit bureaus: Equifax, Experian and TransUnion. Additionally, you can ask the three credit bureaus to have a freeze or fraud alert put on your account.

Additionally, you should file a report with the Internet Crime Complaint Center. The IC3 will refer your case to the appropriate law enforcement agencies.

While doing a search for your name alone does not put you at risk, the same cannot be said for Googling your credit card number, according to cyber-security experts. Search engines could keep tabs on the search and thus your credit card data. AOL recently ignited an uproar when it provided researchers with the search terms used by over 50,000 subscribers -- including Social Security numbers, medical conditions, and other information that could be used to identify a Web surfer. It pays to remember that once personal information enters cyberspace, it is impossible to know where it will end up.

Monday, December 15, 2008

Be Credit Card Savvy When Shopping for the Holidays

Before you step out the door with your credit card in hand for some holiday shopping, take some time to go over both your credit card statement and the credit card's terms and conditions. Such a review can help you avoid irresponsible spending with your credit card and can help those with multiple credit cards choose the best plastic for making holiday purchases.

One of the first things to consider is the credit limit for the credit card you will use for gift buying. Be sure that your credit limit has enough room to accommodate all the holiday presents you plan to buy. You certainly do not want to go over your credit limit during the holiday season. If your credit card balance is near your limit, even a few gifts could be enough to send you past the limit -- and into the world of penalty fees and higher interest rates, the credit card equivalent of a lump of coal in your stocking.

To prevent this from happening, find out the amount of your credit card balance either by looking at a statement or by calling the credit card issuer directly, and compare this to your credit limit. It may be possible to set up an e-mail alert through your credit card issuer that lets you know when you are nearing your credit limit. If you are getting close, you should try to pay off more on your credit card balances in November and December so that your bill in January doesn't end up including any nasty fees or a steeper interest rate.

Another thing to be careful of when using a credit card at holiday time is the danger of finance charges. For shoppers with several credit cards, avoid charging items on plastic with two-cycle billing. A credit card with two-cycle billing allows the card issuer to charge interest retroactively.

To understand two-cycle billing, let's say your credit card has a zero balance at the start of December. During your holiday shopping, you charge $1,000 on that credit card. You then pay $990 in January toward your credit card balance, with plans to pay interest on the remaining $10 on your next bill. However, two-cycle billing will charge interest on the entire $1,000 although you already had paid 99% of the balance on time. As a result, the amount of interest you pay will be significantly higher than it would with single-cycle billing.

Using a low interest credit card can save you from paying more for those holiday gifts, since carrying a balance means you do not get a grace period on new purchases.

Meanwhile, it's good to plan for the possibility that not every gift will be exactly what everyone on your list wanted. It might be hard for your aunt to enjoy a sweater that is two sizes too small, for example. Therefore, hold onto any credit card receipts as well as the original packaging the gift came in to help your friends and family make any necessary returns. Also, remind whoever gets the gift to leave tags on any presents they would like to return or exchange.

And, when making the initial purchase, you should ask about each store's return policy, since some stores may be tougher about returning merchandise, particularly with items that were on sale or seasonal. While a store should post its exchange or return policy, it is not required to do so by law, so asking the salesperson is a smart move. Gift receipts, offered by many stores, can be enclosed with the present to make returns easier.

Separately, if the gift you just bought later goes on sale, you may be able to ask the store for a price adjustment.

Happy shopping!

Sunday, December 14, 2008

Credit Card Fraud Danger Lurks in Magazine Inserts

Consumers who receive magazines or catalogs in the mail could be the target of credit card fraud. Many magazines and catalogs arrive in the mail with pre-printed, pre-approved credit card applications containing your personal information -- presenting a golden opportunity for identity thieves.

While these credit card applications make it easy for consumers to apply for some extra plastic, they also make it simple for identity thieves to apply for a credit card in your name.

Too often, magazines and catalogs may be thrown away without considering the fact that these credit card applications, along with the consumer's name and address, is easily accessible to any criminal willing to do a little digging. Other consumers may make a habit of giving away old magazines without the possibility of identity theft even crossing their minds.

Experts encourage consumers to tear out these inserts and destroy them, as well as cutting out the name label printed on the publication.

Friday, December 12, 2008

Credit Card

Credit card issuers will often mail out notification of changes to a card's terms along with the bank's privacy policy. But if consumers don't look carefully, the notice of a change in their credit card's terms could get lost in the shuffle.

The bank may keep you up-to-date on its privacy policy when you open a new account, on an annual basis, or when the privacy policy gets changed. The credit card issuer's privacy policy outlines the ways in which the bank collects and uses your personal information, including data on your income, account balance information, and credit history. The privacy policy likely notes the way your personal information is shared both within the bank and externally -- with financial and non-financial companies alike.

Additionally, the privacy policy regarding your credit card may explain when your information is shared, such as to protect against fraud, when reporting to a credit bureau, and with your consent.

You may have the ability to request that certain personal information is not shared in specific cases. Perhaps you do not want non-financial companies to get a look at your data, or maybe you would rather that certain branches of your bank not have access to sensitive information about you. Still, your request may be overridden by the law and certain information may be exempt from your request for protection.

To exercise some power over how the credit card issuer treats your personal information, you will need to get in touch with them. The bank should provide contact information in the mailing so you can inform them of your privacy policy choices.

While all this privacy policy information is very helpful to the cardholder, you are more likely to be concerned about changes to your credit card terms. "Change in term" notices are often enclosed along with the mailing that provides information on the bank's privacy policy. However, the printed material announcing a change to your credit card terms may be easily overlooked if you think the letter only contains privacy policy information.

An issuer may notify you of changes to a credit card's terms involving the interest rate, the events which trigger the credit card's default APR, and various fees.

The notification of a change in the credit card's terms can also offer you the chance to opt out -- that is, the ability to decide you don't want to continue using the card once the new terms take effect. Opting out involves notifying the credit card issuer that you do not accept the changes. You will need to read your opt out information carefully to find out the proper way to opt out.

Opting out of card terms that no longer resemble what you signed up for can be a smart decision. After all, if you applied for a low interest credit card, but the new terms put you in danger of triggering a high default APR, then you may not want to accept the changes to your credit card.

So when you receive a letter from the bank regarding your privacy policy, be sure to also look for information on any changes to your credit card terms.

Thursday, December 11, 2008

Paying Off Credit Card Debt Vs. Funding Your 401k

When we are presented with two options that both seem good, it can be tough to make a decision. This is true in the case of the choice between using extra money to pay off credit card debt or to invest in a 401k retirement program -- both of which are recommended by financial advisers.

In an ideal situation, it would be possible to both pay off credit card debt and contribute the maximum amount to an employer's 401k retirement fund. But for most of us, we have to make the most of a limited amount of money. So for Americans faced with the decision between paying off credit card debt and funding their 401k plan, how should we best put our money to work?

First, consider your credit card debt. According to the Federal Reserve, the average interest rate on credit card accounts is nearing 15%. That is very costly, especially since credit card interest payments are not tax-deductible. So with most credit cards charging 15% interest on whatever balance is owed, paying off credit card debt is equal to earning a guaranteed 15% return on your money.

Next, consider your 401k plan. Many employers will contribute $0.50 for every dollar you put into the plan, for a guaranteed 50% return on your investment. Additionally, the money you invest in your 401k plan grows tax-free until you take it out. That is a major difference from the money used on a credit card, which gets no special tax treatment.

Based on this logic, it looks like the 401k, with its tax-advantaged 50% return, trumps paying off your credit card debt and its regular "return" of 15%. However, when you consider that a 50% employer match on your 401k investment is a one-time deal, while 15% interest on a credit card balance in ongoing, it becomes clear that you should first pay off the credit card debt.

But in order for the math to work in your favor, after paying off the credit card debt, you have to make sure not to run up a balance again in the future. Additionally, once you have erased your credit card debt, you should contribute the full amount to your 401k.

It is almost always a good idea to avoid carrying a credit card balance. But what if you feel you should begin contributing to your 401k immediately, and therefore have to revolve a credit card balance to do so? Could this be a better option for you than paying down your entire credit card balance first?

To do the math, imagine you have $150 each month in extra money as well as a $4,000 credit card balance racking up 15% interest. In this case, the minimum credit card payment each month would be about $90.

If you choose to first get rid of your credit card debt, by using the full $150 each month to pay down your balance, you could eliminate the credit card debt in 32 months at a cost of $756 in total interest. After your credit card balance had been reduced to zero, you could then invest the entire $150 into your 401k each month. With an employer match of 50% and an annual 8% return, your 401k would reach $5,410 in 54 months -- the same time frame we will consider below.

However, if you decide to begin contributing immediately to your 401k, putting $100 a month toward paying off your credit card debt and the other $50 into your retirement plan, it will take those 54 months to eliminate your credit card debt at a cost of $1,341 in interest. With the employer match and an 8% annual return, you would have $4,890.

By first paying off your credit card debt, it would be erased almost two years sooner than by trying to use money for both the debt and the 401k simultaneously. Meanwhile, your 401k would grow by an additional $500 over the 54 months. Therefore, paying off your credit card debt first, then investing fully in your 401k, wins out.

Of course, since a credit card bill is paid with after-tax dollars while a 401k is funded with pretax dollars, a truly real-world comparison must include the impact from taxes.

As an example, if you are in the 25% federal tax bracket, you need to earn $200 to net $150 after taxes to pay off your credit card debt. But if you decide to tackle the debt while also investing in the 401k as outlined above, you need to earn just $183 for the $100 after taxes and the $50 pretax. The difference could then be also invested in your retirement account.

Using this approach of both paying down the credit card debt and investing in the 401k, you would have $6,508 at the end of the multitasking period. But if you first paid off your credit card debt, you would then have more to contribute to a 401k, which would in turn yield $7,188.

Therefore, when given the option, it makes financial sense to first tackle your credit card debt completely before then moving on to contribute the maximum amount to your 401k plan. One way to quickly reduce credit card interest payments (which can save you both time and money) is to apply for a balance transfer credit card with a lower APR than the credit card you are currently using. Lower interest rates mean smaller credit card bills, which in turn mean less time paying off a credit card balance and an earlier start contributing to a 401k.

In closing, to truly make the most of your money, employ good financial behavior. Always pay off your credit card balance, and be sure to take advantage of a 401k plan that offers an employer match.

Wednesday, December 10, 2008

Credit Card Users Need Not Strive for Perfect Credit

Most consumers probably know that credit card applications are approved or denied on the basis of their credit score, that all-important number with a huge bearing on your ability to borrow money. While many of us wish our credit score was higher, experts suggest there is not much reason to concern yourself with striving in vain for a perfect score, particularly if your credit score is already excellent.

For starters, even those people who are exposed to lots of credit scores have to admit perfect scores are very, very rare -- if they are ever seen at all. With the popular FICO score, the range goes from a very poor 300 all the way up to a perfect 850. But even the vice president of public education at Experian, one of the three major credit bureaus, acknowledges that she has never seen an 850.

Rather, she notes that the majority of high scores peak at about 825. As a result, your time may be better spent looking for the Loch Ness Monster or Bigfoot rather than hoping to catch a glimpse of a perfect credit score.

Another reason why credit card users need not struggle to hit the top end of the credit score range is practical -- they just aren't going to see much benefit going from excellent to perfect. Washington, D.C.-based advocacy group Consumer Action explains that consumers who improve their credit score from a 775 to an 850 will not see a difference in their rates.

Therefore, if you are able to get a fair interest rate and enough credit when you apply for credit cards, there are other things to focus your energies on as opposed to battling to get your credit score even higher. For example, try alphabetizing the items in your refrigerator.

However, for those of us who have been denied a credit card or loan due to credit scores below the high 700s, there are ways to get your score up that you may or may not have heard before:

Don't go overboard with your use of credit. Even those consumers who pay off their credit card balance every month could still show debt on the day their credit history gets pulled, explains FICO-score developer Fair Isaac Corp. By always using credit carefully, you can be confident that you credit use will appear sensible no matter when your lenders look at your credit history. Aim to use about 25% of your available credit.

Keep credit card applications to a sensible number. While it may be tempting to fill you wallet with the great variety of credit cards available through, if you want to emulate those people with the highest credit scores, it might be better not to. That is because those consumers with the top credit scores tend to apply for credit much less than the average of twice a year. And, having an excellent credit score means you are more likely to get approved for those credit cards you really want.

Keep your creditors honest. Even if you always pay your bills on time, it won't do your credit score much good if creditors don't report how dependable you are. If a creditor mistakenly hits you with a fee for late payment, be sure to call them and get the situation resolved quickly. Otherwise, you may be not only end up paying unnecessarily, but your credit score may take a hit unfairly.

Don't be afraid to look at your credit report. Like taking a look in your basement, it may be scary to discover what is actually contained in your credit report. Additionally, some consumers may worry that pulling their own credit history could hurt their credit score. But this is not the case. In fact, purchasing or taking a free look at your credit history could actually help your credit score, if you use the supplied information to correct any mistakes in the report and to improve your credit use. While you may not end up with perfect credit by following these recommendations, you can still be content knowing that your improved credit score is the best it can be.

Tuesday, December 9, 2008

Pay by Credit Card to Help Your Credit Score

You might think that just because you are financially responsible, with no debt and a responsible borrowing history, that your credit score would undoubtedly reflect that. But you may actually not be providing the credit bureaus with enough information to help your credit score if you do not use your credit card.

That lack of credit card use could leave your credit report "unscoreable." In fact, some 50 million Americans have too little credit activity to qualify for the most commonly used credit score.

If you do not use any credit for six months, the credit bureaus may be unable to calculate your credit score. While you should still be able to borrow money under these circumstances, any approvals will take longer and you might end up paying a higher interest rate.

Even positive information only stays on your credit history for so long, so it is important to show that you have paid off recent debts. As older auto loans and mortgages disappear from your credit history, replace them with an ongoing display of responsible use of credit cards.

Just a little credit card use is enough to keep your credit score up-to-date. All it takes are some charges on your plastic, and then the quick payment of your credit card bill. These charges could be as small as using your credit card for groceries or gas -- which could also earn you a little something in return if you pay with cash back credit cards or reward credit cards.

You may wonder why credit scores matter if you do not plan to borrow any money. But should you find yourself in an emergency and needing a home-equity line of credit immediately, or you buy a second home and require a mortgage, a solid credit history is crucial. Additionally, the rate on your homeowners and auto insurance could be influenced by your credit history.

As a result, it is a smart move to stay aware of your own personal credit history, which is used to calculate your credit score. You can order a free credit report every 12 months from the three major credit bureaus -- Equifax, Experian, and TransUnion.

Meanwhile, it is not only people who prefer paying by cash, check or debit card that may find themselves without a credit score. If you have lived abroad for some time and have not used a U.S. credit card while overseas, you could find yourself without a credit score on your return home.

Therefore, many Americans will see their credit histories benefited by consistent use of a credit card and prompt repayment of their bills.

Monday, December 8, 2008

Pay Attention to Pennies and Minutes When Paying a Credit Card Bill

Most consumers know that there are penalties for failing to pay their credit card bill in full or on time. But the penalties can be no less severe when you are short a few pennies or late a couple of minutes with your payment.

When paying your credit card bill, you probably know that if you can't pay the amount in full, you should at least pay the monthly minimum. Doing so will spare you the pain of getting walloped by an interest rate that suddenly jumps to a much higher level. However, you could still get hit with a spike in your credit card's interest rate if your minimum payment is even a few pennies shy of the monthly minimum.

Let's say the minimum payment on your latest credit card statement is $230.11, but the check you mail out totals $230. While that $0.11 difference may not be much, it can end up costing you lots of money. That is because your credit card issuer will still consider your payment below the minimum payment due. And, as all wise consumers know, credit card interest rates may go up when the payment is less than is required. That could spell trouble for what may have started out as a low interest credit card.

Meanwhile, you likely make sure to get your credit card payment sent out so that it reaches the bank in plenty of time before the due date. But what if you happen to mail a check or approve an online payment that arrives late, even by a few minutes? In the credit card issuer's eyes, your payment is late nonetheless. And, that could result in a hefty late charge on your next credit card statement.

One way to make sure your full credit card payments get where they need to be on time is by setting up an automatic electronic payment plan. You can do this through the bank you have a checking account with or through the website of your credit card issuer. Most credit cards list a website address on the back, which you can visit to set up a user ID and password. If you encounter any problems, you can dial the toll-free customer service number that is usually listed on your credit card or on your card statements.

Even if you have great credit, a small mistake could tarnish you excellent credit history. So be sure to pay the minimum on your credit card bill (or more) in advance of the due date.

Friday, December 5, 2008

Simple Rules Can Help Prevent Credit Card Debt

Credit Counseling Service has one simple consideration: whether you can manage your credit card properly.

As the CEO of the nonprofit group that helps consumers break free from debt, Richard Skaggs has seen a lot -- including individuals carrying as much as $200,000 in credit card debt.

However, the Consumer Credit Counseling Service's chief executive said following some easy steps can keep consumers from falling into the pit that is credit card debt.

Skaggs urges credit card users to establish a budget and then to follow that budget exactly. In other words, don't be tempted to charge that plasma TV to your credit card on a whim when you haven't budgeted for it this month.

Also, he tells consumers not to carry a balance on their credit cards for longer than six months. Skaggs explains that beyond that point, the compounding of simple interest can produce a very expensive balance to pay off. If it helps, think of your credit card balance as a snowball that grows larger as it rolls downhill.

Furthermore, reward credit card holders might end up spending more than the reward itself is worth if they don't pay attention to the fees and interest associated with their credit card. Visitors to can view such information for a specific credit card by clicking on the "apply here" button, then selecting an underlined link for "pricing and terms" or "terms and conditions."

The CEO also recommends looking for a low interest credit card if your credit card's interest rate is excessive. Still, he tells consumers to be aware of the normal interest rates on any balance transfer credit cards once the low introductory rates expire.

Overall, Skaggs stresses the importance of consumers taking responsibility and managing their finances.

And, should credit card holders get in over their heads, many card issuers will work with customers who take the initiative to call with the goal of working out a payment plan.

Thursday, December 4, 2008

Take Easy Precautions to Avoid Credit Cards Pitfalls

While careless use of a credit card can leave you in debt, approaching your credit cards with a dose of common sense will ensure this doesn't happen. By taking some relatively easy precautions, your credit card will always be a helpful tool.

Having a wallet full of plastic can make it tough to keep track of how much you owe on each -- which can spell trouble when it is time to pay your statements. Therefore, try to keep your plastic at a manageable level. For some consumers, that may mean only carrying one of two credit cards.

But just because you scale back on your credit cards doesn't mean you should go ahead and cancel all your excess plastic. For one thing, canceling numerous credit cards all at once may result in a drop in your credit score. This is because the total balance across your credit cards will increase to a higher percentage of your overall credit limit when you have fewer cards.

Additionally, by holding on to credit cards you have had for a while, you will maintain your credit history. So instead of getting rid of your rarely-used cards, dust off older credit cards and use them occasionally to keep the accounts active.

Meanwhile, many credit card users end up in debt trouble when they revolve a balance from month to month, allowing interest charges to accumulate. Other consumers end up having to pay late fees when they neglect to get a payment in on time or when their check gets tied up in the mail.

Instead, opt to have the balance on each credit card paid by the due date using an electronic funds transfer from your checking account. In addition to helping you avoid late fees, the knowledge that whatever you spend is coming out of your bank account can be a sharp reminder to keep spending in check.

Visit the credit card issuing bank's website to set up an electronic funds transfer. You can get help with this by calling the bank's customer service number printed on the back of your credit card, as well as on statements.

Sometimes, consumers may revolve a balance on their credit card because they do not have enough money to pay their entire bill at the end of each month. To prevent yourself from spending more than you can afford, record the amount of every credit card transaction in your checkbook.

By following these steps, you will avoid the pitfalls many consumers fall into when they use credit cards recklessly. And, if you use a reward credit card or cash back credit card, your careful spending will actually help you come out ahead.

Wednesday, December 3, 2008

Online Search Tool Allows Users to See if Social Security, Credit Card Numbers Available on the Internet

A new free online tool can help consumers find out if their Social Security and credit card numbers are available publicly on the Internet. Using TrustedID's, consumers can search a limited database that includes 2.3 million pieces of information.

Social security numbers, unlike credit card numbers, are widely exposed through public documents. While it is fairly easy to get a new credit card in the case of loss or theft, it is much tougher to receive a new Social Security number. In fact, individuals are limited to three replacements of their paper Social Security card each year and 10 over their lifetime.

Why are Social Security numbers so easily accessible? One reason is the frequency with which they are used. Companies that provide a service first and bill you later (such as utilities and cell phone providers) ask for a Social Security number in order to check your credit report to ensure you are reliable borrower.

Meanwhile, every doctor and dentist's office in the U.S. has a record of patient's Social Security numbers -- the security of which is up for debate. And, up until 2004, states were allowed to include Social Security numbers on drivers' licenses, while before 2001 states could sell lists with those numbers.

Separately, thieves may obtain Social Security and credit card numbers through the use of "key logging" software that is secretly installed on computers to record what is typed, as well as through phishing schemes that trick consumers into entering personal information onto fake websites that are designed to look like those of a bank or credit card issuer.

Luckily, recent developments are working in consumers' favor. States and counties have started to remove images of documents from their websites that include Social Security numbers, or to block out the numbers themselves.

New York is among four states that have taken down links to images of public documents containing Social Security numbers, while the Texas attorney general on February 21, 2007, issued a legal opinion that county clerks could be committing a crime by revealing Social Security numbers online.

TrustedID has assembled a database of compromised Social Security and credit card numbers that could be bought or traded online. While its tool is free, TrustedID sells services to consumers that provide them with greater control over who views their credit reports.

For consumers that find their data has been compromised, ordering a copy of their credit report from three main credit bureaus is the first step. visitors should use /free-credit-report.php to request a credit report from credit bureaus Experian, Equifax, and TransUnion.

Should you turn up any unexplained accounts on your credit report, alert the credit bureaus, credit card issuers, and merchants involved. You can also let the Federal Trade Commission and local law enforcement know, and you may decide to freeze your credit to block anyone from opening new accounts in your name.

But all consumers, regardless of whether their Social Security and credit card information is floating in cyberspace, should request copies of their credit reports each year. Also, computer users should install anti-virus and anti-spyware software on their PCs and make sure it stays updated.