Easy come…easy go
Are you aware? Consumers in the United States owed $17,570,000,000,000 in total debt as of the third quarter (Q3) of 2024, according to Experian data. That’s $50,000 for every man, woman and child in the USA. Think that’s a problem?
Credit management: The rules of credit management are few and simple…
· Don’t spend anything you cannot pay for in the month in which the charge occurred
· Do not carry multiple credit cards
· Payoff all credit card charges every month…no exceptions
· Do not roll credit balances from one card to another
· Don’t ever pay just the minimum payments on a card
· Get credit card debt paid off quickly (Dave Ramsey or Mary Hunt can help)
· Buy what you need, want what you have.
· Use it up, wear it out, make it do, or do without!
Small example. Did any of you ever buy a pizza on your credit card? Let’s assume you bought a small pizza and paid $12 for it. When the bill comes you just decide to make the minimum payment on your card. Two questions for you:
· How long will it take you to payoff that pizza?
· How much will you pay for it by the time it’s paid off?
You’ll probably guess low on both counts: 33 years and $91 and change.
Now one more question. Did you ever eat a $91 pizza? Me neither.
So, if I have to be careful about credit cards, how do I create credit?
· If you need to create a credit history, consider building a relationship with your bank.
· Borrow money for small things, 90-180 days if possible, backed by your savings if necessary. Deposit the money in your savings account and pay it off early. Repeat as often as necessary
OK, I got that, now how do I manage my credit?
· Check your credit reports annually at www.AnnualCreditReport.com (see note below on your legal rights). Here are the direct contacts for each credit reporting bureau:
o Equifax
Equifax Credit Information Services, Inc
P.O. Box 740241
Atlanta, GA 30374
To order report: 1-800-685-1111
To report fraud: 1-800-525-6285
Web site: www.equifax.com
o Experian (formerly TRW)
National Consumer Assistance Center
PO Box 2002
Allen, TX 75013
To order report: 1-888-397-3742
To report fraud: 1-888-397-3742
Web site: www.experian.com
o TransUnion LLC
Consumer Disclosure Center
P.O. Box 1000
Chester, PA 19022
To order report: 1-800-888-4213
To report fraud: 1-800-916-8800
Web site: www.transunion.com
The law that requires credit bureaus to give you a free credit report once each year also grants permission to the bureaus to attempt to “up sell” or advertise other products and services to consumers at the time they request their reports. And you can say, no thanks!
The best place to get your free reports is at, www.AnnualCreditReport.com or by calling 877 322-8228. Remember you are entitled to one free report each year from each of the three credit bureaus. You don’t have to get all of them at the same time. Consider asking for a report from one of the bureaus every four months. By the end of one year, you’ll have the total picture from the credit bureaus.
If you discover discrepancies in your bill paying history or reported indebtedness, work through the dispute process until you get it fixed. It’s not an easy task, but persevere! (More on that in a couple of paragraphs…it’s important enough to repeat.)
· Pay all your bills on time or ahead of time…it affects your FICO scores. It is generally wise to pay bills when they arrive rather than waiting until the due dates. If your payment is “made” on time, but does not arrive and get posted to your account by the due date, you may experience a Late Payment ding at the credit reporting agencies. You must make certain that your payments arrive early enough to be posted on time. Many of the payment locations are in obscure locations with poor mail service.
· Know your debt agreements with the credit providers. Don’t guess.
o Principle of Fine Print…read before you sign…all of it
o Changing the Rules – beware that some of that fine print may give your lenders rights to change the rules without telling you
o Filler Material – don’t get weary reading through all the wherefores and whereases. There is usually lots of mumbo jumbo designed to make you tired of reading. If you don’t understand, holler for help, and read it ALL until you understand.
o APR – be sure you know what the effective rates of interest charged involves
o Late Fee – sometimes they change billing dates without warning. Stay alert. The location of the payment center may work against you getting your payments in on time. Pay quickly to avoid even a day’s delay.
o Slip Up, Pay Dearly – do not slip up, period
o Over-Limit Fee – beware of fees they will charge you if you charge over the pre-approved spending limits
o Transaction Fees – watch out for these “in your face” charges
o Arbitration – find out your rights to third party arbitration or mediation of complaints and disputes
Get Back at Your Creditors from Mary Hunt of Debt Proof Living and Everyday Cheapskate (she’s the BOMB ) www.debtproofliving.com and www.everydaycheapskate.com
“Late fees, punitive interest rates, over-limit fees, and loading up your credit report with negative information–it’s enough to make you scream! It’s not that your creditors are doing anything illegal. You just didn’t understand the power you gave them when you accepted that card. It was buried in the fine print. Now it seems like they’re staying up nights looking for new ways to stick it to you. If you’ve had enough, maybe it’s time for you to turn the tables and get back at them.
· Pay early. Nearly 30 percent of a credit card company’s profits are derived from fees: annual fees, late fees and over-limit fees. You’d think they would be pretty satisfied with all that interest you send them each month. But no. They want more. Get back at your credit card company by making a decision right now never to pay another late fee. Be quick with your payment. Send it in the preprinted envelope that came with your statement. Don’t enclose a note, use a paper clip, decorate with stickers or do anything that will pull it out of the fast track and into manual processing.
· Open eyes. All of your creditors know what’s in your credit report. They read it regularly. You should too. Part of your agreement with them is that they can check up on you whenever they want, to see how you are handling your financial affairs. You can get back at your creditors by staying ahead of them. Manage your credit report by reading it regularly. (It’s free but only if you get it at …remember? (www.AnnualCreditReport.com) If you don’t understand what it says, ask. If your creditors are punishing you for things on your credit report that are not true, don’t sit back passively. Get it fixed. Then confront your creditors. Don’t back off until they reverse the action.
· Pay off. Nothing will benefit you more than bringing your balances to $0. It’s like getting a tax-free raise because you get to keep all of that money you’ve been sending each month to your creditors.
· Zero tolerance. Your creditors are not going to be thrilled with you and your zero balances. You are the source of their income. They will miss your money terribly. Get back at them by refusing ever to pay another penny in interest. If they’re charging an annual fee, tell them bye-bye. Getting back at your creditors will bring you great satisfaction. An even greater payoff is the peace of mind you will enjoy. You’ll sleep well and get along better with the people who mean the most to you. It’s a proven fact that even your health will improve. Of all financial pressures, credit card debt causes the most deadly type of stress.
©Copyright 2010 Mary Hunt
Everyday Cheapskate is a Registered Trademark
I’m not kidding…JUST DO IT
