"Learn the Secrets I Used to Wipe Away Negative Items on My Credit Report & Raise My Scores Over 200 Points!"*

Credit Repair Tips - Grab Your FREE report (a $77 value!) Just enter your email addresss to the right & it will arrive within seconds!
E-Mail:

Need Credit Repair Help Right Now? Check Out the Top Credit Repair Services on the Net!

May 26, 2009

Should I Close My Credit Card Account?

Five Considerations to Keep in Mind When Closing Accounts

With the interest rate hikes that have affected thousands of consumers across the United States, many consumers are considering closing credit card accounts as a means to avoid these higher fees, and to keep their credit under control. However, closing a credit card account should never be a rash decision – you need to take into account several factors when making the choice. In some cases, closing a credit card account may do your credit more harm than good. The following are five issues to think about when dealing with a credit card account and whether or not you should close it.

1. The Age of the Account – if the credit card is one of your oldest credit card accounts, closing it will erase much of your payment history. Creditors typically place a high value on the length of time that an account has been opened, so if you shorten your credit history, you may damage your credit score.

2. The Balance of the Account – if the account is currently carrying a balance, don’t close it. Pay off the account first, and then close it. When you close an account, the available balance is shown as $0, so if you close an account that has a balance remaining, it will appear that you have maxed out your credit card – a sure way to lower your credit score.

3. The Terms of the Account – compare the terms of the account you are thinking of closing to the terms on your other cards. If the account has better terms than some of your other cards, you may want to reconsider closing the account.

4. The Balance of Other Credit Card Accounts – if your other credit cards are carrying a high balance, closing your credit card account may damage your available credit ratios, which in turn will result in a lower credit score.

5. The Number of Other Credit Card Accounts – never close your only credit card account. Having a mix of different types of credit is an important part of your credit score. If you need a card with better terms, shop around until you find one that suits your needs better, and transfer your balances, rather than close out the account.

Once you’ve made the decision to close a credit card account, do so formally – write a letter to the company asking for the account to be closed. In addition, make certain to request a letter stating that the account is being closed in good standing. This can be important for your records in case you need to put a statement on your credit report explaining the account’s closure. Additionally, be certain to destroy the old cards, including cards that others may have had as authorized users of the account. This will minimize the chance of identity theft, and will avoid any inadvertent attempt to use the card in the future. Closing a credit card account can be a wise move, but only if you make certain that it won’t harm your ability to get new credit in the future.

Posted in credit cards | No Comments »



May 12, 2009

Credit Card Holders’ Bill of Rights: Hype or Help?

While it’s not official yet, the aptly named “Credit Card Holders’ Bill of Rights” is one step closer to becoming law. The bill was recently passed by the House of Representatives, leaving the Senate to take up the issue next – if passed, the new laws would go into effect in July 2010. As consumers struggle in the current economic downturn, the recent interest rate hikes on credit cards across the board have been met with disapproval on many levels. However, credit card companies and their lobbyists continue to push against this new reform. So what will the Card Holders’ Bill of Rights mean to you if it passes? Among the proposed changes that consumers can feel hopeful about are:

  • An end to Universal Default – credit card companies will no longer be able to charge you the default rate on your credit card just because you’ve missed a payment to another card issuer.

  • Prevention of double billing cycles – credit card companies will be prevented from using your past billing cycle to increase your interest charges.

  • No more retroactive rate increases – rate increases will no longer be applied to past balances, or past billing cycles.

  • Mandatory 45 days notice of rate increases – if your credit card company wants to raise rates, it will have to notify you 45 days in advance. This gives the average consumer more time to shop around for a better rate.

  • Limited Fees on Subprime Credit Cards – no longer will credit card issuers be able to charge fees upwards of 90% on subprime cards. The new legislation will put a cap on the fees at 50% of the card balance, with only half those fees allowed to be payable at the account opening.

Needless to say, credit card companies are lobbying hard to avoid these new regulations. They claim that credit will be more difficult to obtain for the average consumer if they are not allowed to continue their current billing practices. Whether or not the bill is ultimately approved, credit card rates are unlikely to lower any time in the near future, as the companies attempt to offset losses expected as credit card defaults continue to climb due to the rise in unemployment across the country. Regardless as to whether or not the bill passes, there are some steps that the average consumer can take to minimize the impact of the current credit crunch:

1. Keep your balances low – lower balances means lower payments in terms of interest.

2. Pay all credit card bills early – make certain that you get the payment in well in advance of the due date, as many credit card companies begin charging late fees if the payment is even one minute late.

3. Read the fine print – many credit card companies have started raising the interest rates on all customers, even those who pay on time regularly. Make sure that your current card agreement is one that you can live with.

If the Credit Card Holders’ Bill of Rights does pass, it will be a huge step forward for individuals who want to build and maintain their good credit. The more transparent credit card companies have to be in their billing practices, the easier it is for consumers to make an informed choice about who to turn to for their credit card needs.

Posted in Credit Card Holders' Bill of Rights, credit card companies, credit cards | No Comments »



May 5, 2009

Paying the Debts of the Deceased – What You Don’t Know Could Cost You

Some debt collection agencies are taking their collection practices to new extremes when it comes to making a profit – collecting from the relatives of the deceased. In most states, the estate of the deceased is responsible for payment of any debts that are presented during the probate period. However, these debt collectors circumvent this process by going directly to the surviving spouse, children, parents or siblings, in an attempt to directly collect. Oftentimes, these individuals are not legally responsible for these debts, and the debt collectors typically do not disclose this fact. By assuming the debt of a relative who has died, these individuals potentially place themselves in a position of unnecessary financial risk.

How can you protect yourself from these predatory practices? There are a few simple guidelines to follow when dealing with creditors who are attempting to collect a debt from a deceased individual. Use these tips to deal with creditors, and if necessary, get legal advice for your particular situation.

Don’t discuss the debts of the deceased. This is likely the simplest solution, overall. Inform creditors who call that the individual they are calling for is deceased. Do not offer additional information, and do not allow the creditor to pressure you into making a payment. If you were not a joint account holder or otherwise responsible for the debt, there is no reason to communicate with the debt collector in most instances.

Don’t provide your personal information. This tip is also important, because if you provide your personal information to the debt collector, they may try to get you to assume the debt, thereby placing it on your credit report. This can have a negative impact on your overall credit, and it also makes it more difficult for you if you later decide that you do not want to handle your loved one’s old debts.

Don’t give in to pressure. If you know that you aren’t responsible for the debt, don’t succumb to creditor pressure to assume the payments. Unless the debt involves secured property that is of value to you or your family, there is no reason to negotiate over payments on a debt that you do not owe.

Do handle any debts on which you are a co-signer or are otherwise responsible. Find out the laws about credit card liability in your state – in many instances, the spouse is not responsible for credit card debt that is not part of a joint credit account. However, if you are jointly responsible for the debts in question, making arrangements sooner, rather than later, can help preserve your good credit.

If creditors are persistent in contacting you, you may want to get legal advice from a local attorney about how best to proceed. In most instances, if creditors do not make their claim during the probate process, they are out of luck – trying to collect from relatives not associated with the original account is a shady practice at best. Losing a loved one is difficult. Don’t let opportunistic creditors make an already difficult time that much worse – know your rights, and don’t offer to pay for any debts to which you are not contractually obligated.

Posted in collection agencies, debt collection, debt collectors | No Comments »