Credit Cards
Credit Cards: What You Need To Know
Card companies often aggressively recruit students in an effort to get them “hooked” on credit by luring them with T-shirts and other freebies when they apply for cards. This booklet is designed to give you the facts you need to become a wise consumer—and the tools you need to use credit to your advantage.
Don’t let yourself be lured by the trivial offers: A credit card is not an invitation to spend money you do not have. Let’s say you spend $500 on a credit card that charges 15% interest and requires a 2% minimum payment each month. Even if you never charge another item and pay the minimum on your account, it will take nearly 7 years to repay your debt. When you have finally paid your debt, you will have paid nearly $300 in interest on your $500 purchase, making your final cost $800.
You may pay even more if you make late payments or go over your credit limit. Always pay on time, even if you just pay the minimum due. When your credit card issuer changes any features, terms or conditions of your credit card, they must give you the details of those changes in writing. They must do this at least 30 days before the change goes into effect.
However, there are some changes to your credit card’s terms and conditions that don’t require advance notice. For the following changes, the issuer must inform you within 30 days after they take effect:
- a change to your credit limit;
- an extension of your grace period;
- a decrease in a charge that is not related to the interest rate;
- a change to any optional service you accepted; and if you have a variable-interest-rate card, the change to your interest rate as a result of a change in the reference rate.
Your credit report has an impact on many important aspects of your life. Your ability to borrow money can impact your housing situation, your ability to have a car, and your ability to borrow money when necessary.
When you are shopping for a credit card, the free t-shirt is not going to save you money or provide you with convenience. Look over the features, benefits, and provisions to be sure that you are applying for a card that will fit your needs and benefit your financial situation, not hinder it.
What Our Clients Say About Consolidated Credit
…Making one payment every month allowed me to focus on proper budgeting and freed me from feeling overwhelmed with my numerous debt payments.
The counselors at Consolidated Credit answered my questions regarding my credit rating and although my credit rating wasn’t bettered by entering a consolidation program, overall my rating will be much higher with my high-interest debts paid off. I’m now on the road to repairing my rating and Consolidated Credit was a big help towards that goal…
Dustin S.
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