Pretty much the day someone turns 18, the credit card offers start arriving in the mail.  When your child starts college, they’ll be hit with even more offers and deals for credit cards both through the mail and on their college campus.  Credit card companies have been known to set up tables around campus and offer free t-shirts and pizza in exchange for signing your name on the credit card application.

Credit cards designed for students have slightly different options and features when compared to a typical credit card for non-students.  There are rewards cards, prepaid credit cards, and basic credit cards all intended for student use – which typically means it is easier to qualify for the card than cards that are not specific for student use.

The differences between student credit cards and traditional credit cards vary and are different depending on the issuer, but here are a number of standard differences of a student credit card:

• Higher interest rates
• Rarely a need to have a minimum income to qualify
• Lower overall requirements for qualification
• Credit limit tends to be lower than the same card offered for non-students; although when payments are made on time, the issuers will usually increase the available limit accordingly.

Students generally do not have to look for credit card offers designed for their situation because card issuers spend millions of dollars marketing student credit cards.  Just walk onto any college campus during the first two months of the spring semester and the number of credit card tables set up may astound you!  Students who are new to the “real world” often sign their name to several credit card applications for the freebies they offer  - and end up getting approved for several cards.  Without careful financial discipline, most of these students wind up in debt before they graduate school (and well before they truly understand what that credit card debt will mean to their financial future!)

You can help your college student manage their money and credit card use by teaching them some of the basics before they start spending on their cards.  One of the most fundamental details they should understand is how quickly credit card interest and finance fees can take over – and how long you could be paying back your $300 weekend treat.  They should be using credit card for necessities and only as much as they can afford to pay back when the statement comes ideally – to avoid having to carry a balance from one month to the next.

Remind your young adult child that paying a credit card bill even one day late often results in a late fee (around $30 average), and can cause your credit card interest rate to increase.  Not only can your interest rate increase on the card you made a late payment on, but if the card has a “universal default” policy, all credit card interest rates could increase as a result of making one payment late.

As tempting as the college campus freebies are, make sure your child understands that signing up for cards just to get the free item is a bad idea.  Each time they apply, an inquiry is made to their credit report and the credit score is reduced.  Having too many applications in a short period of time will see the credit score drop quite low – and it’s definitely much harder to repair a low credit score than it is to start out with a good one.

Even though it’s clear that credit card companies tend to have the upper hand when it comes to matters related to using your credit cards, the Fair Credit Billing Act gives you a number of rights that you can exercise whenever you need to.  For more information about your credit card rights, you can contact the Federal Trade Commission (www.ftc.gov).  This is the most reliable resource for learning about credit card fraud, how to deal with lost or stolen credit cards, fair billing rights, and unfair or deceptive business practices.  You can also submit consumer complaints if you feel your credit card rights have been violated.

Disputing Credit Card Charges

Disputing a charge on your card is likely to be the most common reason you’ll need to exercise your credit card rights.  Sometimes a merchant accidentally double charges your credit card, you may get billed for items that never arrive, or that are received defective.  You can dispute these charges by following the following procedures:

1) Contact the credit card company within 60 days of the statement listing the item you want to dispute.  There is an address on the back of your credit card statement to use for “billing inquiries”.  Write to them and be sure to include your account number, your name, and the details of what happened and what you want the credit card company to do to remedy the situation (refund the charge).

2) Sign the letter and make a copy for your own records.  If possible, make copies of your dated receipts for the item you are disputing the charge for.  When you mail the letter and supporting documents, be sure to send with a method that gives proof of delivery – certified mail is a good option and will not cost you much more.

3) The credit card company will open an investigation, during which time you are not required to pay for the item being disputed, or finance charges accumulating during that time (on that item’s price).  If you win the dispute, you will not have to pay for the item or the finance charges.  If you do not win the billing dispute, you will have to make the payment.

Handling Unauthorized Charges

The second most common situation that requires credit card users to exercise their rights is when unauthorized charges appear on their statements.  Most credit cards have a $0 liability policy for charges you didn’t authorize; and some will require you pay $50 (which isn’t bad considering unauthorized charges are typically a result of a thief getting your card and going on a shopping spree that could run up hundreds or thousands of dollars!)

The moment you see an unauthorized charge on your credit card statement, you must get on the phone and contact the customer service department to report the charge(s).  They will put a hold on the account so that no further charges can occur while the matter is investigated.

When Your Debt Is More Than You Can Pay

If you spend more on your credit card than you can afford to pay back, or your circumstances changed after you charged the purchases - you have a right to be treated fairly during the debt collection process.  The Fair Debt Collection Practice Act requires that all debt collection methods are done using fair methods, and are prohibited from contacting you during certain hours, or make false statements designed to bully you into paying the debt.  If your credit card company or debt collectors working on their behalf goes outside the Fair Debt Collection Practice Act regulations, you can report them to the proper authorities.

As satisfying as it may be, cutting your credit cards into tiny little pieces with a pair of scissors is not the same as canceling your credit card! While people commonly cancel their credit card(s) in an effort to get out of debt and prevent themselves from falling into credit card debt again in the future – it can actually hurt your credit worthiness to close your accounts completely.  Closing credit card accounts lowers the amount of available credit you have; and it increases the amount of debt you have in relation to the amount available – both factors used in calculating your credit score.

If you are considering canceling your credit card(s), consider the following seven things:

1. If you intend to make an expensive purchase in the somewhat near future, don’t cancel credit cards. Canceling credit card accounts often results in a lower credit score temporarily, and can make it harder to obtain credit for other purchases.

1. When you do cancel a credit card, be sure to request the company reports it to the credit bureaus as “canceled by customer’s request”, otherwise it could appear to future lenders viewing your credit report that your accounts had been closed by creditors who couldn’t get their money from you!

1. Avoid closing credit cards that have balances.  When you cancel or close a credit card account that still has a balance owed, the credit card company could raise your interest rate to the maximum interest rate limitations for your state as a penalty for closing the account with a balance.

1. If you are looking to cancel credit card accounts because you have too many open accounts, look at options for balance transfers instead.  Moving money to your lowest interest credit card is an effective way to pay less in interest, and reduce the number of payments you must send each month.  Once you move balances from a credit card to another card, you might consider closing the cards without balances (or just leave them open and unused if you don’t have a problem with having too much available credit showing on your credit report).

1. When canceling credit card accounts, request written confirmations of the cancellation from the credit card company.  Remember where you file this document as it will come in handy if you one day receive notices from the account of finance fees and such for an account that’s not being used and hasn’t been closed!

1. If you can’t seem to keep your hands off your credit cards when the urge to buy something comes up, canceling your cards may be in your best interest even if your credit score takes a temporary hit.  It beats the alternative of getting further and further into debt with irresponsible credit card use which will create an even lower credit score.

1. When you call to cancel a credit card, if you’ve been a decent card customer don’t be surprised if you are transferred to the “cancellation department” or other specialty department.  The representative you speak to will likely attempt to convince you not to cancel the account by offering you special incentives for sticking around.  If the incentives interest you, you might consider negotiating even better deals – if not, don’t be afraid to insist on closing the account despite what could become pushy sales tactics.

Balance transfers are excellent opportunities to move high interest balances to a low or no interest credit card.  More of your payment will go to the principal balance owed and less to interest, which helps you pay it off faster.  Unfortunately, if you’re not extremely careful of the small print details, your balance transfer could actually do more financial harm than good.  Here are 5 things you’ll want to take a closer look at before moving your balances from one card to another – if you don’t, your transfer could do more harm than good!

1)You forgot to look at what the interest rate will be on the remaining transferred balance once the balance transfer promotional period ends.  A typical balance transfer offer lasts  between six months and a year, with any unpaid balances from the transfer receiving a much higher interest rate once the promotion ends.  If you’re unable to pay off the transferred balance within the promotional period – what interest will you be charged on the remaining balance?  Is it higher than what you’re currently paying?  You’ll have to figure out whether or not you can pay off a large enough portion of your balance during the promotional period to make a higher interest rate worth it once the promotion ends.

2)You forgot to consider the balance transfer fee.  Even if you’re moving your high interest balance to a zero interest card, many transfers result in a transfer fee.  A typical transfer fee might run 3-4% of the balance, with a cap of $25 or $50.  The problem is when a credit card does not set a maximum transfer fee – so if you transfer $7,000 with a 3% balance transfer fee you end up paying $210 just to move the balance!

3)You made a payment three days late.  Low or no interest balance transfer offers don’t give you any room for errors.  If you make even just one payment a couple days late, chances are you will lose your balance transfer offer and the interest rate will increase to the rate you would have received at the end of the promotion.  If this happens, you’ve probably paid the balance transfer fee to move the money to the new card, and now you very well could be paying higher interest than you were BEFORE you moved the balance!  If you’re going to move a balance from one card to another, you cannot make a late payment.  If you make more than one late payment, you could see your interest rates climbing to 30% in which case the balance transfer has done nothing but cost you money.

4)You didn’t consider your realistic possibility of being approved for the promotional offer.  If you sign up for a card offering 0% interest on balance transfers, it doesn’t necessarily mean you’ll be approved for it.  The problem is, if you sign up and fill out your balance transfer information on the application and don’t get approved – most card companies will open a new credit card and transfer the balance under different (higher) interest rate terms.

5)You didn’t pay attention to what the no or low interest offer covers.  Most cards with a 0% (or low interest) balance transfer offer only give you the promotional rate on the balances you transfer from another card.  If you make purchases using your new credit card, they’re almost always charged at the higher interest rate.  Many credit card companies apply your payments to the low or no interest balances first, meaning the entire time you’re paying off your transferred balance, any new purchases are accumulating interest fees.

With a lot of cases of unemployment and families who are struggling to survive, there will be many incidents where people find they can not make their monthly credit card payments or meet other financial obligations. It can be embarrassing and stressful to realize there is just not enough money to go a round, the absolute worse thing you can do is ignore the situation. You have to take action, pick up the phone, and speak to the credit card company just as soon as you realize the situation you are in. If you wait until you are already past due or in collections, you may find that negotiations are not possible.

Here are some tips for letting the credit card company know you aren’t able to make a payment.

Decide Who To Call

If you are still on schedule, you should contact the customer service department to discuss what is going on. If you have already gone past due with your bill, you will need to get in touch with the collections department.

Be Upfront

If you are not able to make a payment due to financial hardships, such as a recent loss of job, you need to be honest and let them know upfront what is going on. Alert them to the fact that you are out of a job but actively looking for one. If you are suffering from another type of financial hardship, be sure to be truthful about what is going on and how you plan to handle it.

State Your Intentions

If you anticipate a time or date where you will be able to resume making payments or pay the card off in full, then inform the representative of your intended timeline. For instance, if you plan to pay your card in full from your income tax refund, tell them you anticipate getting a refund at a certain time. You can offer to pay a small payment to commit to that deal as a sign of good faith if you can afford to do so.

Make Other Arrangements

Many credit card companies will require you to make some type of payment to keep your account in good standing. Calculate what you can afford, even if it is just $10 a month, until you are able to make bigger payments or pay off the balance in full. You want to meet the requirements that will keep you from being turned over to collections. Work out a mutual agreement based on what you can afford and make sure you make those payments faithfully and on time.

Ask For Help

If you are struggling and can not commit to any arrangements, ask the credit card company for help. Many companies will have a policy and experience helping those in unexpectedly bad financial situations.

Again, the worst thing you can do is avoid or ignore the situation. Once you get turned over to collections, it will become more difficult to get help. Collection agencies work on commission in most cases and will be ruthless in pursuing the money and less enthusiastic about wanting to help you out.

Also remember that once you commit to arrangements, make sure you do everything you can to honor those commitments. It can be too easy to decide that your tax return can buy a lot of nice stuff and simply disregard your promise to pay off your credit cards. If you care about your credit score, and you certainly should, you will make your credit cards a priority until you are finally able to pay them off in full.

While there is some consumer relief about the recent ruling on the perceived unfair practices of credit card companies, don’t expect to feel the weight lift off until July 1, 2009.

There have been many consumer and policymaker complaints voiced and now it seems the National Credit Union Administration, the Office of Thrift Supervision, and the Federal Reserve have addressed these complaints and have ruled on several popular issues.

For starters, the ruling will allow consumers to have adequate amounts of time to pay their monthly payments. It has become increasingly common for credit card companies to change their timeline of payment, which essentially shortens the payment window and often a late fee will be incurred, unbeknownst to the customer. With the new regulations, lenders such as banks, credit card companies, and credit unions must make certain that monthly credit card statements arrive to customers at least 21 days before the monthly payment is due, giving more ample opportunity for all consumers to make on-time payments.

Credit card companies are also prohibited from using methods that would maximize interest charges in an unfair manner. Consumers who have existing balances will not be subjected to a rise in interest rates. Also, for those who carry two different balances, credit card lenders are banned from crediting all of the payment to the lower interest balance and taking advantage of the interest accrued. For customers of the subprime credit card, there will be a limitation of fees which limit the fees the cause a reduction in the credit limits available to consumers.

Additionally, some other controversial tactics practiced by credit card companies in the past will now be a thing of the past. There have been new policies set forth that will now restrict or outright prevent such unfair practices such as double-cycle billing practices, raising the interest rates on cards with existing balances, and universal default.

Finally, there is new regulation about credit cards that charge an advance fee for opening an account in cases where that fee would constitute most of the customers credit limit. For instance, say you open an account with a credit limit of $100, the company can no longer charge $75 just for establishing the account.

While it may seem like a long time until the new regulations come into play, there is no time like the present to get a better understanding of the terms and conditions of your current credit card lenders. If you have never actually read the disclosure statements you receive in the mail, you should start immediately. Review your existing accounts and if you find they do not fit your needs, start researching and comparing other credit cards that may be a better fit. There is not many bigger financial mistakes than paying out your hard-earned money simply because you o not understand something you have signed up for or because you are not as informed as you should be. Take the time to read up all the way each credit card works, especially when it comes to fees, penalties, and the APR conditions of the card. The new regulations are not yet in place so you still need to be extra cautious when it comes to your accounts.

Society thrives on instant, convenience, and did I say instant? We have become adapted to a fast paced way of life. No one wants to wait for anything any more and in many cases, consumers get what they want – no wait. Of course the drawbacks to that impatience are many, but for the purpose of this article, we’ll say that “instant” is the best thing since sliced bread.

As technology advances, it makes it much easier for people to do things than even just a few years ago. Case in point, when it comes to credit cards, you no longer have to wait a month or more to fill out, send, get approved, and get your new credit card back to you in the mail. Now, it is as simple as logging in, filling in the blanks and sending the information instantaneously again. In less than 60 seconds, you will know whether or not your application has been approved.

How Is That Possible?

Since most major financial institutions now use online applications, it is relatively easy for a bank to check your identity and your credit score in no time at all. As long as your FICO score meets the requirements set by the lender, the credit card company can reply to you in minutes and let you know you have been approved. Granted instant approval will only happen for those with excellent credit ratings but it can be just as beneficial to the non-qualified applicants to know their applications have been rejected.

Why It Is a Good Idea

Allowing you the convenience of online applications, credit card companies are also providing you with other benefits you may not get elsewhere.

Better Offers

Using the online applications and taking advantage of the research capabilities may afford you a better deal than you can find in your mailbox.

The More You Know

Finding out your approval status fast can make it easier to make important financial decisions. If you use the traditional paper application, you might have to wait a month or more to find out you were not approved and then starting the process all over again will take even more time. This is not going to work if you are in need of credit for personal use or for business reasons.

Additional Security

Many people have concerns about the safety of their applications but it has been shown that online applications are even safer than the traditional paper ones. When you mail in your credit card applications, you still run the risk of that information being stolen and used fraudulently. Using the secure online applications, the information that leaves your house is encrypted, meaning that no one else can read the data.

Instant Access

In addition to instant approval, you may find that some lenders will also give you instant access to a portion of your credit line. A lending institution may offer immediate access to your account online, using a password. This can be very beneficial to those who need the money.

Whether or not time is a factor for you when it comes to credit cards, you definitely have an advantage when browsing credit card promotions online and applying once you find the card that works for you. Having time on your side can help you keep better track of your finances and when planning for the future. With the advanced technology of today, it is now safer than ever to conduct your business online and take advantage of the offers and deals you can easily find through an online search.

We have all read the advice that in order to reduce our debt is to cut credit cards out of our lives. While it is true if you are trying to get out of debt, it is wise to stop spending but that doesn’t mean you have to nix your plastic all-together. In fact, credit cards can be an effective tool for helping you eliminate your debt and get back on the right financial track.

So how does that work?

Well, the credit card industry introduced what was once simply a promotional offer known as the 0% APR credit card. This marketing ploy is now one of the more traditional features of many credit card companies. A 0% APR credit card is a big change from the days of old when most credit card account holders paid a standard annual percentage rate of about 18%. Now, credit card companies have found success with and are more capable of offering different interest rates to consumers, depending on their own credit histories.

Limited Time Offers

Today credit card companies will typically all offer some type of reduced APR incentive, if only for a limited time. It is the 0% APR credit cards that are the most sought after; particularly those that extend the zero rate for an entire year or more. Because there is no interest accruing for whatever time limits you have, consumers can take advantage of the situation and transfer balances from higher rate cards in order to pay off the debt faster. It will not only help you reduce your debt but it can also help you save some big time money.

Transferring balances can be a way to ease debt if you qualify for a 0% APR card. However, it is important to note that some cards offering balance transfer deals may also take you for a ride with excessive fees for the transaction. The only way to avoid this mess is to very carefully and thoroughly read the terms and conditions of each credit card before you apply. It is also important to note that if you do not take particular care to make all of your monthly payments on time, you can not only lose your 0% rate, you will likely incur a dramatically higher rate that will only drag you into further debt.

For Those Who Qualify

Those with excellent credit histories will probably get first dibs on the good credit card offers but if your credit is in order or if you can do some leg work to repair your credit, you might find that a 0% APR credit card to be an effective tool in reducing your other debt. If you make your payments and a commitment to stop making new purchases above and beyond the balance transfers, you can make the credit card truly work for you.

When you are seeking a card with a 0% APR for balance transfers you will also need to make sure the rest of the card will work for you in other ways. For instance, make sure you know what happens when that 0% offer runs out of time. Will the interest rate after the incentive period be way higher than you can afford? Also consider what will happen if you are unable to pay off the entire balance transfer in full before the limited time offer expires. There is a lot to consider when choosing to use a credit card to reduce your debts. Take time to understand how to make the credit card work for you and your finances in every aspect.

Anyone who has ever applied for a loan, a credit card, or a mortgage can certainly understand the importance of an excellent credit score and a solid credit history. Those planning to borrow any kind of money will likely get their acts together and make sure their credit report is top-notch way before approaching lenders.

However, did you know that your credit score can impact your life way more than when just dealing with loans and financing? Here are some other ways your credit score gets involved in the other financial aspects of your life.

Renting an Apartment/House

It is becoming more and more common for landlords and property managers to run a credit check on potential tenants before agreeing to rent out a residence. If your credit history is not good, it is likely you will find it difficult to rent. Landlords want to limit as much risk as they can and they will use a credit report to look for a history of late or missed payments. The credit report may also show a history of past renting problems including evictions. A landlord will expect full, on-time payments each month and if you can not prove through your credit report that you are capable of doing just that, they will likely look for another tenant.

Applying for a Job

You may have noticed that more job advertisements will advertise the condition of a credit check for new applicants. Not all employers will make this mandatory but the idea is catching on. Typically, all jobs involving finances or government clearances will automatically require a background check and a credit check but even other industries and employers will use the credit report as a gauge to the type of employee you will be as well as any risk due to your own financial problems and instability.

Obtaining Car Insurance

Whether you know it or not, car insurance companies use your own credit score to come up with the rates you pay for your insurance. It is believed that as a credit score decreases, the risk of insurance claims increasing, meaning it is a risk for the insurance company to provide coverage on your vehicles.

Getting Homeowner’s Insurance

Just like your car insurance, insurance companies that provide coverage for homeowners will use your credit score as a basis for your policy rates. If you want the lowest premiums possible, you need to make sure your credit is in order before shopping for better rates.

When all is said and done, your credit score is obviously important but you may not have even realized just how vital a good score can be in other areas of your life. If you are working to reduce your debt and straighten out your finances, you need to really analyze and focus on repairing your credit. This in turn will help you to save money on your monthly expenses. You may find you get better rates on credit cards and loans, which lowers your payments each month. Take advantage of that free credit report you get every year. It is up to you to get control of your credit history and work actively towards making it the best it can be. Fixing your credit is an important step to dealing with your finances and it is important to remember that there will never be an easy fix. Be proactive when it comes to your credit and your budgeting.

You may think your kids are prepared to go off to college and make all of the right choices. However, statistically, many college students are not as knowledgeable about personal finances as parents may think. For many kids, they have relied on mom and dad to make financial decisions on their behalf and in many cases, some kids who do earn their own money have no real idea of how to manage it properly.
 

This can be dangerous for two reasons.
 

1. Many parents will provide their college kids with emergency credit cards but not teach them the responsible way to use it or the consequences that will result in misuse.
 

2. College campus are alive with credit card kiosks that offer free t-shirts and other merchandise in order to entice newbies into applying for a credit card. Without proper financial know-how, kids can get themselves into a big money mess in no time at all.
                       
So what is it that kids don’t understand? Here are some common areas college students misunderstand credit.
 

Everything Charged is Free
If only it were that simple, the world may be a better place. But, alas, that is far from the truth. However, since many kids parents are the ones getting the statements each month, kids may not understand that the pairs of sneakers and endless pizzas they have paid for on credit also accumulates interest and penalties and fees. They also fail to realize that if they fail to make a payment each month, their credit can essentially be destroyed by one too many pizzas.
 

Credit Reports Are With You for the Long Haul
Many young adults have no idea what a credit report is or that it will follow you for a lifetime, especially a bad one. Teaching kids the basics and the real-life consequences of bad credit may be able to clue them in as to their responsibilities when using a credit card. College students need to understand that what they do or don’t do know, can come back to kick them in the butt 7 to 10 years from now.
 

What Constitutes an Emergency?
Parents often hand over a credit card and tell their child to only use it in an emergency but will fail to describe what actually would be an emergency. For some kids, an emergency might mean that they ran out of beer for the frat house but for parents an emergency means they need to buy books and materials to pass a class. Parents should provide a list of suitable purchases in conjunction with the credit card and have a talk about expectations from both sides.
 

Financial Information Needs to Be Confidential
Young adults talk to each other about all kinds of things. For this reason, many students may not realize that in meeting all of these new “friends” there needs to remain some level of confidentiality. Students need to understand that passwords and account information should not be passed around to everyone. Kids need to understand it is not okay to give your sorority sister your credit card to run to Walmart. While your new friend may be the most trustworthy person on the planet, you might only find out the opposite when they stick you with a large credit card bill and leave you stranded in a really bad situation.
 

Without parental intervention, college students may seriously be at risk for life-long debt. Parents should not wait too long to begin educating their children on finances. Even taking a young child to the bank each week to make their own deposit can help enforce the importance of saving and spending wisely. If you are prepared to arm your college student with a credit card, make sure you are also arming them with good financial common sense.