National Debt Relief - BBB Accredited Business - Get Relief From Credit Card Debt, Medical Bills And Unsecured Loans

3 1/2 Circumstances When It’s Okay To Take On Debt

Inductive reasoning is when you try to determine the truth of something by reasoning from the specific to the general. An example of this in the case of debt would be:

I have this debt, which is bad.
Therefore, all debt is bad

woman with percentage signs and credit cardThe problem with inductive reasoning is that it’s impossible to prove its conclusions are true. And this is certainly true in the case of debt. Despite what you may have been told many times over the years not all debt is bad. In fact, most financial experts today recognize the fact that there can be good debt as well as bad debt.

Bad debt

Bad debt is debt you use to finance things you consume. The biggest example of bad debt is probably credit card debt because of the way most people use credit cards, which is typically to buy clothing, furniture, a cell phone or to pay for a night out on the town.

Even though we may not want to admit it, using debt to pay for a vacation is also bad debt. A vacation might improve your health and emotional outlook and help you be more productive when you get back but vacations never appreciate in value. When you use debt to finance a vacation you’re basically borrowing from tomorrow in order to pay for today’s fun. Once the fun is over all you really have left are some happy memories and a lot of debt. This is especially true if you use debt to finance a vacation you can’t afford.

What is good debt?

What’s good debt? Many financial experts now regard debt you use as an “investment” as good debt. How, you might ask, can any debt be considered an investment? It can be if you use it to buy something that will increase in value over the years and contribute to your general financial health. Here are three concrete examples of debt that most experts would agree is good debt.

Buying a home

Getting a mortgage to buy a house is considered to be good debt because housing always increases in value over the long run. As an example of this where we live houses have increased an average of 12% just in the past year. If you lived here and bought a house a year ago for $200,000 home, it would now be worth at least $224,000 and would therefore be a very good investment. In addition, owning your home can contribute to your emotional health because for most people owning their homes gives them a heightened feeling of security and happiness. Of course, it’s important to never take out a mortgage that you can’t afford, as this would turn that good debt into bad debt.

Going back to schoolDiploma with money

A second example of good debt is to finance your education if you decide to go back to school to further your career. In fact, this could be a very good debt because it’s likely you would be able to see a nice return on the investment. As an example of this let’s suppose you were to spend $20,000 to get an MBA, which then enabled you to get a job earning $10,000 more a year. You would have that MBA “paid for” in just two years and by year three you would be clearing a “profit” of $10,000 a year. Of course, just as with using debt to buy a home it’s important that you don’t run up too much student loan debt. Studies have shown that when people end up owing $50,000 or more on student loans it’s because they used too much of the money to finance expensive vacations or for their everyday living expenses.

Going into business for yourself

A third situation where debt can be considered good is if you’re starting a business. According to the website Nerd Wallet two thirds of today’s millionaires are entrepreneurs – meaning that they started their own businesses. If you’re starting a business and need to purchase equipment or lease space you could need an SBA (Small Business Administration) loan to help you get started. Just as with going back to school you need to borrow as little as possible. For example, instead of leasing space you might be able to work out of your home. If you do need to borrow money you might be able to get it from family members at much more favorable terms than if you were to go to a bank. Of course, you will still need to be diligent about paying back the money or you could end up causing a horrible family situation.

The ½ — buying a car

This is definitely a gray area because most experts would say that buying a car is bad debt – as automobiles never appreciate in value. In fact, the minute you drive a new car off the lot it will lose somewhere around 20% of its value. However, if you require that automobile to get to and from work or if you use it in your business then it could be considered to be good debt. If the size of your family has increased and you need a larger sedan or an SUV in order to haul everyone around, you could consider that loan to be good debt or at least necessity debt. If you do find you need a new vehicle, it’s always better to buy used and avoid that 20% depreciation you’d get hit with when you drive a new car off the lot. You’ve probably seen dozens of television commercials offering 24- or 36-month automobile leases. When the leases run out on all those vehicles they are sold at much more affordable prices, which means you might be able to pay off that loan in 36 months instead of 60 or even 72.

When it’s okay to use a credit card

As we said before, credit card debt is bad debt. But if you keep your balance low enough that you can pay it off every month then having a credit card can be a good thing. Using a credit card is certainly safer than carrying around a big wad of cash and can be more convenient than writing a check. The credit card business has become very competitive and there now numerous cards available that come with nice rewards in the form of points, airline miles or cash back. So long as you can pay off your balance at the end of every month it’s certainly okay to use a credit card and reap some of those rewards. In fact, there are people who put everything on a credit card – groceries, gas, clothes, movies, school supplies, take-out meals – in order to earn the maximum number of miles or cash back. There’s absolutely nothing wrong with this strategy as long as you pay off your balances every month. But if you start carrying balances forward you could soon find yourself paying 15%, 19% or even more in interest, which would quickly gobble up those airline miles, points or cash back you’re earning.

Here, courtesy of National Debt Relief, is a short video with 10 good tips for using your credit card(s) sensibly.

The Things You Should And Shouldn’t Put On A Credit Card

A credit card just might be the ultimate frenemy. Depending on how you use it, that little piece of plastic could be a good friend or an awful enemy. There are really only two secrets to keeping that credit card a good friend. The first is to use it sensibly. The second is knowing what and what not to put on it.

Using a credit card sensiblyman holding multiple credit cards

This is relatively easy. If you want to use that credit card sensibly you need to keep the balance low and pay it off at the end of every month. What’s a low balance? That’s pretty simple, too. It’s whatever amount of money you have to pay off your card when you get your statement. How much is that? This is question that only you can answer, which means doing a little budgeting. Sit down with a spreadsheet program or a pencil and a piece of paper and list all of your expenses – both fixed and variable. Your fixed expenses would be things like your rent or mortgage payment, car payment and insurance. Your utility bill, transportation costs, clothing and entertainment would be variable expenses. When you finish your list add up everything and subtract this number from your monthly take-home pay. If you have money left over, which we hope you do, you should save some of it and then budget the rest for your credit card. Let’s say, for the sake of the example, that after you subtract your fixed and variable expenses and the money you’ve earmarked for saving you have $100 left over. This then is the balance you could afford to carry on a credit card because you would know you would be able to pay it off at the end of the month.

The danger of carrying balances forward

Why you don’t want to carry a balance forward from month-to-month is because of the power of compounding interest. This is something else that can be either a friend or an enemy. It can be your friend when you’re saving money but an enemy when you create debt. The way it works with a credit card is that once you carry a balance forward you’ll be charged interest on it, which will be carried forward to the next month where you will again be charged interest. This means you are now paying interest on interest. That’s compounding. And it can get ugly. If you were to run up a $5000 balance on your credit card at 15% and made only a minimum payment of $112.50 it would take you 266 months to be rid of that debt and would cost you $5,729.21 in interest – or more than that original balance.

What to put on a credit card

You’ve already seen the real answer to that question, which is to put no more on that credit card than you can pay off when you get your statement. So long as you know what that number is you can put anything on that card and you should probably charge as much as possible as this then becomes a record of your spending, which you could use in your budgeting.

The one exception

The one exception to this rule of charging only what you can afford is major purchases like a washer-dryer or refrigerator. If you need to buy one of these big-ticket items and don’t have the cash available it could be okay to put it on a credit card. Just keep in mind that you will need to pay back the money, which means budgeting for it. If you were to put a $1000 item on that credit card you should budget an extra $100 or $200 a month to pay it off as quickly as possible and keep from falling victim to that old devil of compound interest.

What not to put on a credit cardWoman depressed over bills

It’s important to remember that credit card debt is unsecured debt. Many experts believe that it’s the worst way to borrow money because it typically carries a very high interest rate – much higher than a car or home loan. Plus, credit card debt is never tax deductible as is the interest you pay on a home mortgage or student loan. Given this, there are five things you should never put on a credit card.

The first is college tuition. There are literally millions of American adults who are still paying for their college educations years after they left school. In many cases they haven’t even been able to find work in their fields of study – leaving them members of what’s now called the “underemployed.”

There are two big reasons why you should never put college tuition on a credit card. The first is the aforementioned compounding interest. The second is that it’s better to fund your education with low-interest student loans, grants, part-time jobs and scholarships as this would save you thousands of dollars over the long term.

Second, don’t put your income taxes on a credit card. Even if you find yourself hit with a big tax liability, don’t charge it. While the IRS makes it easy to make your payments with a credit card there are several reasons to not do this. First, the payment processing company will assess a fee of 1.88% to 2.35% and this will only add to the burden you’re already facing. In addition, the IRS will let you set up a payment plan with a much better interest rate. As of this writing its underpayment interest rate charge for each quarter is just 3%, which is much better than you would get with any credit card.

A third thing you shouldn’t put on a credit card is a vacation. While getting away from the stress of everyday life can feel really good don’t finance that trip with a credit card. If you do this you’ll only be coming home to the problems caused by that debt. A better solution is to plan a vacation that fits within your means such as camping, staying at hostels or visiting friends and family members. You say that’s not your idea of a dream vacation? Then set up a vacation fund, contribute to it every month and you will eventually have the money in hand to finance your dream vacation.

You should also never put a big wedding on a credit card. You might be tempted to have a really lavish event but just as with a vacation, you need to plan a wedding that will fit within your means and avoid creating credit card debt. We know that this will be a very special day for the two of you but it’s not worth it if you have to begin your lives together laboring underneath a huge pile of debt.

Last but not least, don’t put medical bills on a credit card. These bills can be staggering but if you talk with your healthcare providers you should be able to get payment plans that have little or no interest and payments you could actually afford. It’s possible that you could also tap into a charitable organization for financial help. But once you put those bills on a credit card that’s it. You ‘re stuck with that debt and with a big monthly payment probably for years to come.

Advice About Low Interest Credit Cards That May Totally Shock You

Here’s a piece of advice you likely won’t read anywhere else except in this article – you may not want to get a low interest credit card. Despite what you may have been told or read getting a low-interest credit card is not necessarily your best option. This is not to say that you should rush to apply for a credit card with a high interest rate but there are reasons why this sometimes makes sense. Of course, if you pay off the balance on your credit card every month it probably doesn’t make any difference whether it has a high or low interest rate because you’re not paying any interest anyway. But there is a case to be made for passing on those low interest credit cards and here it is.Multiple credit cards in one hand

1. Low interest credit cards offer fewer benefits

A good rule of thumb is that credit cards with low interest rates generally offer fewer benefits than those with higher interest rates. As an example of this, airline rewards cards that have high interest rates not only come with frequent flyer miles but they often have other perks such as priority service, checked baggage fee waivers and even an airport lounge membership. Of course, you could always have one of these cards for its benefits but then charge most of your purchases to a low-interest credit card, which would give you the best of both possible worlds.

2. Low interest credit cards offer no rewards

If you choose a credit card that offers no rewards you will have a lower interest rate than other cards that offer miles, points or cash back. This means that if you generally carry a balance forward from month-to-month then a low interest card might make better sense. On the other hand if you hardly ever carry a balance, and rarely have to pay any interest charges, you might be better off with a higher interest rate credit card they would offer you a return on your spending.

3. You may not qualify for the lowest possible rate

A lot of credit cards have a range of interest rates and the one that you get will depend on your creditworthiness. When you see an offer with a very low interest rate this might actually apply only if you have excellent credit. If not, your rate won’t be that low. If you don’t know your credit score make sure that you get it before you apply for a new credit card. The three credit reporting bureaus – Experian, Equifax and TransUnion – will give you your credit score free though you may have to jump through some hoops to get it. There are also websites such as Credit.com and CreditSesame where you can get your score free.

4. You’ll miss out on any sign-up bonuses

The credit card business is very competitive. Banks often offer new customers hundreds of dollars in miles or points just for signing up. However, when you choose a low-interest credit card you probably won’t get one of these generous offers. This is because if the bank knows you won’t be paying much interest every year, there’s no incentive for it to offer you a big sign up bonus because you will never be paying enough interest to offset the cost of the promotional offer.

5. You won’t get 0% interest

It doesn’t take a mathematical genius to realize that a card with 0% interest is better than even a very low interest credit card. Many of the higher interest credit cards offer interest free financing on both balance transfers and purchases. While there are cases where these cards might also offer a low interest rate, those that have the very lowest interest rates generally do not offer this type of promotional financing.

6. You could end up carrying a balance

If you were able to get a credit card with a very low interest rate this could encourage you to start carrying a balance. Of course, you’ll always save money if you pay your statement balance in full every month. But if you get a low-interest card and feel that it’s now okay to carry a balance forward, then the card probably isn’t worth it.

7. You could get hit with a penalty interest rate

If you fail to make a payment on time you could get hit with a high interest rate even if the card has a low interest rate. This is called a penalty interest rate and it can be as much as three times higher than your normal interest rate meaning that this could end up being incredibly costly. Fortunately, there are some credit cards that have no penalty interest rates such as Citi Simplicity and the Discover it Card. While these cards have competitive interest rates, they may not be the lowest you could find.

man jumping with chart behindWhat’s the difference between a good and bad credit score?

As mentioned previously if you do want a credit card with a very low interest rate you must have a very good credit score. But what is a good credit score? Lenders often look at credit scores as follows.

• Between 700 and 850 – Very good or excellent credit score
• Between 680 and 699 – Good credit score
• Between 620 and 679 – Average or OK score
• Between 580 and 619 – Low credit score
• Between 500 and 579 – Poor credit score
• Between 300 and 499 – Bad credit score

What this translates into is that if you have a credit score of 620 or higher you should be able to get whatever credit you apply for. However, to get the very lowest interest rate you would need to have a credit score above 700. And, of course, the higher the score the better. The overwhelming percentage of lenders use what’s called your FICO score. It’s available only on the site www.myfico.com. However, it would cost you $24.95 a month to get your FICO score monthly as well as your credit reports from the three credit- reporting bureaus. As mentioned previously, you can get your credit score free from a variety of sources and while it might not be your true FICO score it should be close enough that you would be able to see how creditworthy you are. It should also tell you whether or not you would be able to qualify for a very low interest credit card.

The net/net

If you’re in a financial position where you need to carry a balance forward from month-to-month then a low interest credit card might be your best bet, as it would save you the most money. Conversely, if you never or rarely carry a balance forward you might be better served getting a higher interest rate credit card that comes with perks such as cash back, airline miles or points. We know of people that will put a big ticket item on their credit cards to earn cash back but then turn around the next day and send a payment to the credit card issuer to cover the cost of the item to avoid having to pay any interest. If you could afford to do this then a higher interest rate might be a better deal than a credit card with a very low interest rate.

Boost Your Credit History Without A Credit Card

credit historyEveryone needs to build a credit history. It is very important that you have yours as early as possible. This history is indicated in your credit report. It simply records your credit behaviour – how much you owe, how you pay them off and how responsible you are with all your credit accounts. If your record is good, you can get a high credit score. A high score will help you secure a lot of financial opportunities that are not available to those who have lower scores.

Some people actually think that this is a ridiculous requirement in our society. Why is there so much importance in building your credit reputation? After all the difficulties experienced during the Great Recession, is it really a wise idea to continue to care about credit? Wouldn’t it be better to just eliminate it from your life?

This is actually what some Millennials are doing. According to an article published on FoxBusiness.com back in 2014, 63% of Millennials have decided not to own a credit card. This was based on a survey done by Bankrate. In comparison, only 35% of 30-year olds and above do not have credit cards. If you think that this will help you stay out of debt – it is not entirely accurate.

Sad to say, our society, or the financial industry in particular, feel differently about credit. They view the use of credit as an important indication of your financial success – especially in relation to your credit report. A six figure income with a bad credit report to match is not something to be proud of. You may actually be better off earning a simple salary but with a good credit history.

One of the easiest ways to build your history is to use a credit card. After all, you need some credit input in your report. However, this is where people are having a hard time coming into terms with. Credit cards may be a common payment method but a lot of consumers have been burned by the debt that they went through in the past. This is why most of them are having a hard time building their credit reputation. There is some hesitation in using it for fear of falling further into debt – since credit card use come with high interest rates.

5 ways you can build your credit report without a credit card

Fortunately, there are ways for you to build your credit history without succumbing to the dangers of high interest credit cards. It is the easiest, but if you are not comfortable with it, that are other options. Here are some of them.

Use existing companies that you pay each month.

We all make monthly payments outside of our credit cards. These include utility bills and subscriptions like cable or the Internet. The companies providing these services to you are not required to report your payment behaviour to the three major credit bureaus (Experian, TransUnion, Equifax). However, they can submit a report if they want to – and if you ask them to report on your behalf. Simply call them and ask them to submit a report just so you can have a record of good payment behaviour. If you are renting, you can even ask your landlord to submit too. Any consistent and recurring monthly payment may be submitted to help add to the data in your credit history. Take note that since this is not a requirement for them, they could deny your request.

Get a small loan from a credit union.

Credit unions, although they provide almost the same financial services and products as banks, are actually quite different. Credit unions revolve around their members. This is why a lot of them have membership restrictions. If you find a credit union that you can join, open an account with them and apply for a small personal loan. They offer lower interest rates compared to the traditional banks. This will help you put some credit data in your credit history so you can show that you are responsible with your payments. In case, you find it hard to get an approval for a loan, you might want to open a secured loan wherein you will use a savings account that you have with them as collateral. This will lower your credit risk and thus increase your chances of getting an approval.

Apply for an installment loan from a retailer.

Retailers of expensive items allow customers to take out an installment loan on purchases. This will require you to make timely payments for a specific period of time. This is important if you cannot even apply for a loan with a credit union. Not only will this be a record in your credit history, it could also help increase your credit score because having variety in your type of credits will affect 10% of your score. Sometimes, in an effort to get customers to pay, retailers offer these loans with little or even no interest rate for the first few payments.

Opt for peer to peer loans.

This is a relatively new way to borrow money. It is usually done online so you need to explore this via the Internet. The popular companies offering peer to peer loans are Prosper and Lending Club. These are simply platforms where investors from the community meet with borrowers. That means, the financing for the loan that you apply for will be coming from investors in the community. The risk is lower so the interest rate for peer to peer loans are smaller compared to traditional banks. The chance of you getting a loan approval is higher here. And since peer to peer lending companies are required to report to the credit bureaus, your credit behaviour will be recorded in your credit history.

Utilize your student loans.

If you have existing student loans, you can use this to help display how responsible you are with your credit accounts. According to NOLO.com, these loans can help you build a payment history. Make sure you practice proper payment behaviour as it will be recorded in your credit report accordingly. And in case you are planning to go to graduate school, you may want to use your federal student loans to help you get more data into your credit report.

All of these options should give you a chance to build your credit history. Just remember that it is not ownership of the loan that will give you a good credit reputation. It is how you behave in relation to that debt. If you stick to your payment schedule and you always pay the right amount, then you can be assured of a credit history that can reflect a high credit score.

Tips to practice proper credit management

The truth is, it is all about proper credit management. Even if you have a high amount of debt (which is really not recommended), as long as you can keep up with payments, you will have a good record in your credit history.

The thing about your credit report is it needs consistent good behaviour. Even if you start with a good report, one mistake can ruin that good record. It is something that you need to take care of for as long as you want to make financial transactions work in your favour.

To help you practice credit management, here are some tips that we can give you:

  • Only borrow what you can afford to pay. This does not mean you should look at your income to determine how much you can borrow. You need to also consider how much debt you currently have and the expenses that you need to pay for every month. If you have to base it on your income, make sure that it is on your disposable income. This is the income that is left after all your other expenses and payments have been paid off at the end of the month.
  • Practice the right payment behaviour. This is 35% of your credit score. If your credit history shows that you do not pay on time and you fail to meet the minimum payment requirement, you will be viewed as an irresponsible credit holder. That will make you a high credit risk because lenders will view you as someone who cannot be trusted with credit. You will either be denied of your loan application or given a higher interest rate.
  • Monitor your credit report. Sometimes, people end up with ruined credit reports after being a victim of identity theft. CNN.com reported that in 2014, the top complaint from Americans (as compiled by the Federal Trade Commission) involves identity theft. The only way that you can detect this is by looking at your credit history every now and then. You need to look at the records to ensure that everything reflected there are all your financial transactions. If there is one entry that you are not familiar with, then you may want to check that out and have it removed.

Credit management will help you maintain a good credit history. But to practice proper credit management, you also have to practice the right financial management habits. This includes budgeting, saving and smart spending. Being cautious with your financial decisions will ultimately help you improve your current financial standing.

Here is a video from the Bank of America to help you build a better credit report.

Tips For Managing Too Much Debt

frustrated woman with a paper and calculatorConsumers today regardless of their social status are being stretched like never before. Consider the fact that the average American household owes more than $16,000 just in credit card debt – meaning that this doesn’t include debts such as their mortgages, auto loans and student loan debts. You must have an inkling that you have too much debt or you wouldn’t be reading this article. But if you’re not sure, here are a few signs that you’re in over your head.

• Your creditors have been calling you
• You’ve left this month’s bills piled up in a corner because you’re afraid to open them
• You’ve been turned down for a consolidation loan
• You’ve tried to borrow money from family members
• You’re taking cash advances on your credit cards to pay other bills
• You’re finding it difficult to make just the minimum payments on your debts
• You’re constantly juggling bills trying to keep all of your creditors happy

Step #1: Determining where you stand financially

There’s not much you can do about getting your debts under control until you figure out where you stand financially. This means you need to determine how much you actually spent in the past month relative to what you earned. If it turns out – as it is almost certain to – that you spent more than you earned this means you’re basically trying to finance a lifestyle you can’t afford.

The first thing you should do is order copies of your credit reports from the three credit reporting bureaus – Experian, Equifax and Transunion. These reports will give you an excellent idea of how you’ve been managing your money, how much you owe, whether you’re over your credit limits, whether any of your debts have been sent to collection and so on. Next, get your FICO score. If you’re not familiar with this score it’s a three-digit number that ranges from 300 to 850. You can get your score on the website www.myfico.com, from any of the three credit reporting bureaus or from websites such as CreditKarma.com. This will give you a picture of how your creditors view you and why you may be having a problem getting new credit.

Step #2: Make a budget

We can guess with almost 100% certainty that you don’t have a budget because if you did you probably wouldn’t be struggling with your debts. The reason you need a budget is because it’s the only way you can allocate your spending in such a way that you will have the money to meet your debt obligations. To make a budget you must track your spending for at least 30 days. This means writing down everything you spent money on right down to the pack of gum you bought yesterday. Next, you’ll need to organize your spending into categories such as food, entertainment, clothing, eating out, insurance and so forth. When you finish this exercise go through it carefully looking for places where you could cut costs. Most people find that the areas where it’s easiest to reduce spending are groceries, clothing and entertainment. So you might take a hard look at these categories first. The objective here is to find ways to cut your spending to the point where you can get your debts caught up to date.

Step #3: Contact your creditors

Just making a budget – and of course sticking to it – could be enough to help you get out of debt. However, if you’re really seriously in debt there are some other things you must be prepared to do. For example, you could contact your creditors and try http://www.instantcheckmate.com/to cut deals. Trust us, they’re just as anxious as you are to get your debts straightened out. You could ask them to lower your monthly payments on either a temporary or permanent basis. You could ask to make interest-only payments for some period of time or have your interest rates reduced.

Step #4: Get your debts under control

One solution to managing your debts is to get a debt consolidation loan – assuming you could get one. If your credit isn’t totally trashed you might be able to get an unsecured loan where all you would be required to do is sign for it. Conversely, if you have poor credit you would probably be asked to put up some asset as collateral to secure the loan. In most cases that asset will be your house in the form of a home equity loan or home equity line of credit. If you are able to get either one of these types of loans you could then use the money to pay off your creditors. It’s almost certain that you would have a lower monthly payment and you would have only the one payment instead of the multiple payments you’re currently making.

A second option is to get help from a credit-counseling agency. If you have a lot of debt and are struggling with it the assistance and advice you would get from a credit-counseling agency could be a godsend. It could help you set up a household budget, evaluate your current budget (if appropriate), negotiate lower payments with your creditors and teach you better money management skills.

The third or what some people refer to as the nuclear option is to file for bankruptcy. If you owe way too much given your income this could actually be your only option. And this will be especially true if you think that one of your creditors is about to seize an asset you don’t want to lose. Bankruptcy would definitely damage your credit score severely and would stay in your credit reports for 10 years. If you’re in such bad shape financially that you think bankruptcy is your only option, the damage it would do to your credit might not be that big a deal.

man shouting at phoneStep #5: Learn how to deal with debt collectors

It’s likely that you’re being hassled by debt collectors and as you well know that’s no fun at all. If you didn’t know this debt collectors are usually compensated on a commission basis. This gives them a big financial incentive to collect from you – regardless of what’s required. But if you’re being threatened or abused by a debt collector it’s important to know you have rights. You probably don’t know about the Fair Debt Collection Practices act (FDCPA) but it gives you certain rights if a collector is harassing you. As an example of this, you can ask him for written proof that you actually owe the debt that he’s trying to collect. The law obligates him to comply with this request. If you don’t think you owe the debt or if you believe that the amount is not correct, you can dispute it. You must put your dispute in writing and send it to the debt collector’s agency within 30 days of when you were first contacted. You also have the right to send the debt collector a cease and desist letter telling him to not contact you again about that particular debt. Be sure to send the letter certified and return receipt requested. When the collector receives your letter he can communicate with you again only for two reasons – to let you know that he won’t be calling you again or to inform you of some specific action he’s about to take to collect the money such as suing you.

Step #6: Give special attention to your most serious debts

Not all debts are created equal. Some deserve special attention because the consequences of falling way behind on them are very serious. Depending on the type of debt, you could lose an important asset, be evicted or see your income tax refunds taken. In a worst-case scenario you could even end up serving jail time. So what are the serious debts?

• Your mortgage
• Car loans
• Rent or utility bills
• Court-ordered child support obligations
• Federal student loans
• Federal income taxes

If you have debts that fall into one or more of these categories you need to focus your attention on getting them caught up. We’ve already discussed one way to do this, which is a debt consolidation loan. Unfortunately, none of these debts can be “settled.” This means that if you can’t get a debt consolidation loan the bad news is that you will either have to find a way to catch up on your payments or file for bankruptcy.

Do You Really Need Any Of Those Store-branded Credit Cards?

man holding multiple credit cardsIf you get a store-branded credit card from a store such as Target or Sears you may get reward points and exclusives such as access to sales events and coupons. These perks can definitely help you keep more money in your pocket. But does it really make sense to sign up for one of these cards?

If your goal is to save money than the answer to this question is a definite “yes.” However, when it comes your credit standing the answer is a strong “maybe.”

What to expect with store-branded cards

In terms of saving money, credit cards from Lowe’s and Target both offer 5% off in-store and online purchases. Store-branded credit cards often come with other money-saving bonuses from the initial discount you get when you open the account to special deals and greater rewards when you reach a certain spending threshold. They may also include financing options for big-ticket items.

There are two types of credit cards. Store-branded cards can generally be used only at the associated store and maybe at a few other retailers that are part of the same corporate family. Then there are cards such as MasterCard, Visa, American Express and Discover that can be used practically anywhere. Of the two types the ones that can be used anywhere are more practical and may even come with more benefits than a store-only card.

If you’re trying to repair your credit

If you’ve had a problem with credit and are working to repair it then a store-branded card may be your best choice. The reason for this is that it’s usually fairly easy to get approved for one of them. Of course, once you get the card you need to use it responsibly or you’ll never get your credit fixed.

poor credit scoreYour credit score

Any time you apply for a new card, whether it’s a general-purpose card such as Visa or a store-branded card this will affect your credit score. This is because when you apply for a new credit account this turns into what’s called a “hard inquiry” into your credit history and this will cause your score to drop anywhere from 1 to 5 points. One or two of these hard inquiries won’t have much of an effect on your score but if you trigger several of them within a short period of time this will definitely affect your credit score and not in a good way.

If you do opt for a store-branded credit card to get a special discount or some other important perk don’t just turn around and close the account. Fifteen percent of your credit score is based on the length of your credit history or how long you have had credit. When you close an account that will interrupt your history and may shorten the average age or duration of your accounts. In addition, a full 30% of your score is based on how much money you owe versus the amount of credit you have available. Most experts say that you should use only 10% to 30% of the total credit you have available. When you close an account, there is less credit associated with you so the percentage of your credit in use – known as your utilization rate – rises. And this is one case where an increase is not a good thing. If you do get a store-branded credit card keep it open and then use it occasionally to make sure the store does not close it due to your inactivity. Plus, this can help boost your credit score.

If you’d like to know more about boosting your credit score, watch this short video courtesy of National Debt Relief …

Outrageous interest rates

One of the things you definitely don’t want to do with a store-branded credit card is carry much of a balance from month to month. These cards generally have shockingly high interest rates. These can range from 18% to as high as 25%. Many of them are linked to rewards programs designed to get you to spend. When you couple this with high interest rates on your outstanding balances this can be a slippery slide into financial problems. If you’re not careful, you could dig yourself into a hole that will be very hard to get out of.

The cards to get

If your goal is to get as much cash back as you can on credit card purchases then you would be best off choosing one of the general purpose cards instead of a store-branded card. The perks offered by store-branded cards generally work only with the specific store. This is even true of cards affiliated with the store that are not store branded. Your better choice would be one of the general-purpose rewards cards. As an example these, the Chase Freedom card currently offers a 0% APR for 15 months and the interest rate after this introductory period starts as low as 13.99%, depending of course on your credit score. The Freedom card also offers a 5% rebate up to $1500 worth of purchases on categories that rotate every three months. For example, Freedom cardholders could recently qualify for money back on purchases at more than 45 department stores as well as Amazon.com.

When to use a general-purpose credit card

There is no question but that it’s always better to use cash than a credit card. If you see something you want to buy on impulse it’s just a lot harder if you have to pull money out of your wallet instead of using that little piece of plastic. Plus, it’s just flat impossible to get in trouble with debt when you pay cash for everything. But there are times when it does make good sense to use a credit card.

For example, in some cases if you buy an extended warranty plan with a credit card the issuer may add a year of coverage at no cost. Second, most credit cards will protect you against fraudulent charges and ID theft by limiting your liability to $50.
If you are traveling abroad, it’s just much easier to use a credit card then carrying a wad of traveler’s checks. There are a few places that favor cash above a credit card but in general the easiest way to pay is with a credit card. However, if you use a card for foreign travels make sure there’s no foreign transaction fee.

When you rent a car with a credit card it will save you money because it should allow you to opt out of the car rental company’s rental insurance. Another good place to use a credit card is for airfare. When you buy your ticket with a card and your bags or their contents are lost, stolen or damaged this will probably be covered. You may also be given money for clothing and toiletries while you’re waiting for your baggage to arrive. Buying your groceries with a credit card can also pay off because many of them offer bonus points for purchases that you make at the supermarket. As an example of this, the Blue Cash Preferred Card issued by American Express offers 6% back when you use it to buy groceries. And finally there are those online purchases. While there is still a bit of risk involved in using credit cards to buy stuff online many credit card companies offer liability protection so that you’re not responsible for any unauthorized transactions so long as you keep your account in good standing. However, it’s important to review your statements every month and if you find unauthorized usage report it immediately.

The Good And Bad Side Of The Rising Credit Card Debt

exchange of debt and cardCredit card debt relief is something that became popular only a few years ago. Before the Great Recession, nobody really thought about getting serious about their card payments. In fact, a lot of consumers seem content with paying the minimum payment requirement on their billing statement.

It was actually not so bad – at least, as long as consumers had a steady income pouring in. But when jobs were compromised when the economy crashed, the credit card payments suddenly became quite a burden. A lot of people struggled to finance their basic needs and ended up skipping on their debt payments. Of course, skipping on payments of credit cards is the worst reaction. Not only will your balance grow because of the accruing interest, your credit score will also suffer. It will hinder you from pursuing financial transactions that could have improved your personal finances.

But although credit card debt caused the downfall of various households in recent years, the increasing balance of consumers can actually indicate something good.

The positive and negative side of the consumer credit card balance

The growing credit card balance of consumers is a good indication that people are more confident to use credit. This is probably because more people have jobs now. According to the study done by CardHub.com, nearly 3 million jobs were created in 2014 and that caused the unemployment rate to go  down to 5.6%. This is considered to be the lowest level for the past 6 years. This means more people have a steady source of income to finance their needs. The positive side of the growing card debt is that people have a higher financial confidence.

Since the US economy is 70% dependent on consumer spending, this boost in credit spending is actually good news. It is an indication of the strengthening economy.

But despite the positive side of this type of debt, it still comes with a lot of negative vibe for consumer finances. Your credit card balance, no matter how much it screams confidence in the economy can still be destructive. At least, it can be true if you do not know how to manage your debt. According to the study of Card Hub, 2014 alone added $57 billion credit card debt – which is an increase of 47% compared to that of 2013. The average credit card balance per household is at $7,200 by the end of 2014. This is a huge amount for a household to carry.

On its own, that balance is nothing to worry about. But if you factor in the other household debts like mortgages, auto loans or student loans, the total becomes unbearable. If you also consider the high interest rate of credit cards, you know that one financial crisis could wipe you out for good.

The thing about the improving economy is that we are lulled into a sense of sustainable spending habits. According to an article published on CNN.com, this February alone, 295,000 jobs were added. However, the article also cautions that people should not concentrate on job growth alone. Although unemployment have improved a lot since the Great Recession, they should also monitor the wages that workers are getting. Despite the increasing number of employment, the wages only got a 2% increase. The article explained that in a healthy economy, the wage increase should be between 3.5% to 4%.

With this in mind, you should know that a new job should never be a reason for you increase your credit card spending. Although you may have more capabilities to  pay it off, it does note mean you should increase your debt too.

How to practice proper credit card management

The key to get the balance between the good and bad side of the rising credit card debt is to practice proper management of your debts.

There are many tips to help you with credit management. According to an article published on USAToday.com, financially successful people use fewer credit cards. Not only that, they also make it a habit to pay their balance in full at the end of each month. They do not let any balance carry over the next month because they know that they will be forced to pay charges and an interest will accrue on their balance. Not only do they pay in full, they also pay on time. They use reward cards to help them save and they also monitor their credit score. These habits help these successful people stay ahead of their debts.

If you want to be a smart credit card user, you need to start implementing what the successful people are doing. Their financial success is evidence that they are doing something right. And beyond that here are other things that you may want to do.

  • Budget your credit card spending. If you want to manage your money – whether that is your income or expenses, you need to budget plan. You want to make sure that your monthly financial resources will be used according to what your life needs. If you need to use your credit card in order to maintain a good credit score, make sure that it is included in your budget. For instance, you will allot $100 worth of credit card spending. You set aside this amount so that you can pay your card statement at the end of each month. Do not spend beyond this amount so you will always be able to pay your balance at the end of each month.
  • Track where your money goes. This is another part of your budget plan. But we will discuss it separately. It is important for you to track your spending because you want to make sure that it is done towards what is necessary. It does not mean you will stop having fun. What you want to do is to get rid of the unnecessary expenses that you just spend on because of peer pressure or as dictated by society. You want to concentrate only on what is important to you. That way, you can limit the expenses that you will make each month – especially those that will be done through your credit card.
  • Try to save by earning rewards. This is the best way to gain something from your credit card spending. If you have to use a card, use it in such a way that you will gain a reward. These rewards can be freebies, discounts, special promotions, etc. Take advantage of these so you can get something out of the debt that you are making.

Remember that your credit card use does not always have to lead to debt. There are a lot of people who have come out of the Great Recession without a scratch simply because they knew how to use their credit cards well. In fact, they were able to survive because they practiced proper credit management.

It is important to understand that it is not the credit card’s fault if you suffered financially in the past. It was your own habits that led you to your financial demise. You can continue to use your card but make sure that you use it wisely. Do not let the balance overflow without knowing how you will pay it back. A good rule is, if you cannot pay for it in cash, then do not buy it. Use your credit card just to keep your credit score high – but have the financial resources to always pay it back.

The 8 Very Worst Mistakes You Can Make With Credit Cards

Video thumbnail for youtube video 6 Tips For Simplifying Your Financial LifeYou could love or hate your credit cards but, of course, they’re just little pieces of plastic with your name and a number on the front and a magnetic strip on the back. Whether you love or hate your credit cards you know it really isn’t the cards. It’s you and how you use them. Credit cards can be real friends when you use them correctly. For example, they offer instant gratification – for better or for worse. There you are browsing through one of your favorite stores and you spot a smart TV for just $499. Unfortunately there’s only $30 in your wallet. But, hey, you don’t have to save money for three months to buy that TV. Just whip out that little piece of plastic and you’ll walk out of the store with it under your arm.

Convenience and security

Credit cards also offer both convenience and security. It’s just much more convenient to carry one or two credit cards than a big wad of cash. If your card is stolen or if you suffer identity theft most credit card issuers limit your liability to just $50 and many cases will even waive that. And of course there are those juicy rewards programs offered by many credit cards. Depending on the card you could earn cash back, points redeemable for travel and other goods and services every time you buy something. If you use your cards regularly and pay your balances in full every month, you can actually come out ahead. Use those cards correctly and you could be flying home free for a weekend with friends.

 On the downside

Unfortunately, those little pieces of plastic can turn into little devils if not used correctly. There are some very bad mistakes that can be made with credit cards and here are eight of the worst.

1. Having too many credit cards

There is a simple equation at work here. The more credit cards you have the more likely you are to use them, which means the more likely it is that you will get into debt. In addition, when you have many credit cards this can negatively impact your credit score, which will reduce your ability to borrow money. Ideally, you should probably have only one credit card because this makes it easier to track your spending and to make your payments on time. There is a case to be made that having three to five credit cards won’t be a problem but if you find your balances are increasing, it’s a danger sign and you need to definitely not get another card

2. Misunderstanding the introductory rate

One smart thing to do if you have high interest credit cards is to transfer their balances to one of the 0% interest balance transfer cards. But when you do this don’t mistake the introductory interest rate for the permanent rate. Those cards make a big thing about the number of months where you won’t be required to pay any interest at all but they tend to put their permanent interest rates in very small type. If you don’t pay off your balance before your introductory period expires you could end up paying 19% to 20% on it.

 3. Failing to read the fine print

If you do make a balance transfer it’s important to read the fine print. It could include two-tier balance transfer fees as well as some limitations. In most cases, your introductory rate will apply only to balance transfer amounts or to purchases for a certain period of time. There could even be a security interest clause that would allow the card issuer to repossess items you bought with its credit card if you fall behind on your payments.

 4. Not shopping for the best interest rate

One of the biggest mistakes people make is to not do what’s called rate shopping. Before you sign up for a new card look for the best possible APR or interest rate. When you get unsolicited credit card offers make sure you note the rate. This is because if you’re having financial problems you probably won’t get the best rates or terms. Always comparison shop for a credit card

 5. Making only the minimum payments

If you make only the minimum payments on a credit card where you have a high balance, you could be repaying the money over several lifetimes. Here’s an example of what this can mean. Let’s suppose you owe $5,000 at 15% and make just the minimum payment of $100. In this case it would take you 79 months to pay off the debt or about 6 1/2 years. Just imagine how long it would take to pay off $10,000 or more.

6. Paying no attention to your monthly statement

When you pay attention to your monthly statements you will know your due dates. This will also allow you to make sure that all of the charges are legitimate. You’ve probably heard of the big data breaches that have occurred recently. These are bound to turn into identity theft and you could be a victim. If you ignore your monthly statements there is no way for you to know that your identity has been stolen. In addition, one of the worst things you can do is be late in making a payment as this can have a very bad effect on your credit score. If you won’t be able to make a payment on time, call the credit card issuer explain what happened and ask it to waive the late fee. Most credit card issuers will be happy to work with you if you just ask for help.

 7. Exceeding the credit limit

When you review your credit card statements every month you’ll also keep from exceeding your credit limit. While the CARD Act stopped the policy of automatically enrolling customers in over-limit programs with high fees, it can still be very embarrassing to stand at checkout and find that your card has been rejected. If you review a statement and find that you’re getting close to your credit limit try hard to pay down your balance before using the card again. And when you go over the limit, you will be charged an over-the-limit fee.

8. Using credit cards to buy things you don’t needwoman looking at a lot of bills

Probably the worst mistake you can make with credit cards is using them to buy things you don’t need. One good exercise is to sit down at the end of the month, go over your credit card statements and look for things you purchased that you don’t really need. There’s a simple fact that we all spend more using credit cards than cash. When you review your statements you might be really surprised at the number of items you bought you could have done without. We all fall victim to making purchases that at the time we think are needs but are just really impulse buys. If you are about to make a really significant purchase like a smart TV or a new refrigerator, wait 48 hours. If you still think you want the item wait another 48 hours. If after that you still believe you need the item then go buy it.

.

3 Ways You Can Pay Your Credit Card Debt

man with tied hands holding a credit cardCredit card debt is something that, unfortunately, most people have. Regardless if it is just a few months to holding a balance for years on end, card payments is as common as sunshine is in the morning. But as people get into debt with their cards and realize that it is one surefire way to cost them a good credit history, they start looking for ways to pay their card balances.

Of course, paying off their credit card balances is easier said than done. Consumers soon find sweat forming on their foreheads trying to figure out their next steps. They fear that they are way in over their head and unsure of their next steps.  At this point, a lot of people just to decide to forget about it and go on hoping against hope that the lender just mysteriously erases all their credit card debt.

Bankrate.com explains that years after the Great Recession, people can’t seem to dig themselves out of credit card hole they are in. It estimates that about a quarter of American consumers have bigger balances on their credit card compared with their emergency fund. This means that people have more debt than funds that’s supposedly used to bail them out of tight financial situations including debt payments.

This further complicates the situation because as people nurse the balances over a long period of time, they are actually throwing away money in interest payments for the credit card debt. The longer the payments are in installment, the  deeper the burn it creates on the household budget and the future financial savings of consumers.

3 options to pay down your credit card balance

If you are staring down debt and looking for ways to tackle credit card payment more aggressively, you are not alone. It is one thing to be in debt but it is another thing  to get stuck in the debt cycle for a very long time. This is not far from happening with all its interest rate, penalties, fees and surcharges eating up on your hard earned money. Here are some ways to pay effectively pay down credit card debt.

Increasing the payment schedule. The most common payment arrangement for credit card balances is once a month. But if you want to aggessively pay down debt, you may want to increase your contributions to twice a month. It will not only decrease your principal balance faster, it will also minimize the interest amount that will accrue on your debt each month. It may be possible for you to make smaller payments each time but make sure, the amount is no less than your minimum payment requirement. If you have a huge debt cutting the payments to smaller pieces might make it easier to handle and budget.

Use the snowball method. Huffingtonpost.com explains this method as aggressively paying down the smallest credit card balance while keeping minimum payments on all the rest. Popularized by finance guru Dave Ramsey, this payment method is more of a morale booster compared with other payment strategies. Reason being is that being able to pay off one debt can give you two things – the confidence to tackle the next one and extra funds to allocate over to the next target. It gives you small wins every time that methodically builds up to prepare you for the big credit card debt payments.

Use the avalanche method. To make it simple to understand, this is the opposite of snowball method. If the snowball method encourages you to tackle the smaller balances first, the avalanche will tell you to pay off the debt with the highest interest rate first. As you pay all your accounts with the minimum payment requirement, the debt with the highest interest will be paid much more. This is actually more practical if you want to save more money. That is because you are also attacking the interest amount that you will pay off throughout the duration of the credit card debt. If the snowball method is for the emotional people, this is for the more logical ones. Those who will opt for the avalanche are concerned about the savings that they will get in the long run over the satisfaction of an early debt payment completion.

All three of these options will help you make better progress in reducing your credit card debt.

How to save on credit card fees and interest rate to lower your balance

Apart from the repayment plan that you will choose, you also have to think about how you can minimize the interest and the fees that are consistently added to your account. Especially after the news from Bloomberg.com, you may want to think about how you can minimize the interest rate on your debt.

According to the article, American Express Co. is planning to raise their interest rate – specifically those on credit cards. This decision came after the company had a big setback caused by an antitrust lawsuit. This information was already cascaded down to the million customers of the said company. The annual rate will climb by up to 2.5%.

In case your major credit card debt is under American Express, then this is one big problem for you. Here are some tips that you may benefit from to reduce the impact of this news on your finances.

  • Do not use your card while paying off the balance. If you keep on using your card while you are in the midst of a repayment plan, it will take you longer to finish paying off all your debts. This is why you should stock your cards for the moment – at least, until you have significantly reduced your debts. Better yet, do not use your card until you have zero balance. Remember that the interest amount that accrues on your balance will depend on the amount that is being carried over the next billing cycle.
  • Never pay lower than the minimum. Paying below the minimum will not only keep your balance high, it will also trigger late penalty fees. If you cannot meet the minimum payment requirement, that will be considered not paying off your monthly obligation. It will cause you to pay the late penalty fee and it will increase your balance. Some companies will even change your interest rate and make it higher because of it. This should be enough reason to encourage you to prevent late credit card payments.
  • Increase your payments. Lastly, you may want to increase your payments each month. This is one of the ways that you can really be aggressive in your efforts to pay off the debt – most especially in minimizing the interest amount that will accrue. Cut back on your monthly expenses by downsizing your lifestyle. Make a lot of sacrifices to increase your extra income so you can pay more towards your card balance.

If you follow these tips, you should be able to keep the interest rate and penalty fees from adding more problems into your credit card debt. You can concentrate your financial resources on paying off everything that you owe. And once you have successfully paid off your balance, make sure that you keep it from piling up again. You should learn your lesson and implement the best practices when it comes to using credit card for your purchases.

Credit Cards’ Nine Biggest Problems And What To Do About Them

woman holding a credit cardWhy are credit cards like automobiles? It’s because they can both be very helpful if used sensibly. An automobile can get you from one place to another quickly and effortlessly so long as you drive prudently. If you don’t you could end up in a serious accident or even in jail. Credit cards are also very convenient but they do come with potential problems just as do automobiles. The old adage forewarned is forearmed is definitely true of credit cards. So here are the nine biggest problems you could have with your credit card and how to handle them.

#1. Your card has a high interest rate

Just do the math and you will see why it’s a problem if your credit card has a high interest rate. The simple fact is that this card will cost you more than one with a lower interest rate. There’s just no reason to have a card with a high interest rate if you have a really good credit score. This is especially true if you’re getting offers from other credit card issuers. If you have good credit and your interest rate is 19% or higher call your credit card company and ask it to lower your interest rate. If it refuses think seriously about transferring the balance on that card to one with a lower interest rate or even a 0% interest balance transfer card.

#2: You find an error or unauthorized charge on your billing statement

It’s practically impossible to turn on the TV these days without hearing about another data breach. The most recent big breach was Anthem Blue Cross/Blue Shield, which was hacked putting its millions of members at risk. You need to carefully review your billing statement every month. While you are not responsible for paying one of these charges or billing errors you need to dispute the problem in writing within 60 days of when the statement was mailed to you. It’s really important to report any errors quickly. You can resolve many problems just by calling the credit card issuer but when you write a letter, it ensures your rights will be protected.

#3: A merchant declined your credit card

It can be embarrassing when a merchant declines your credit card. There can be several reasons for this. You could be over your credit limit or your card has expired. Or maybe it’s been canceled. The important thing is to always carry a backup funding source so you can pay for your transaction in the event your credit card is declined. If this happens, there is a phone number on the back of your credit card that you should call to learn why your card was declined. It might be something that could be cleared up very quickly.

woman looking tired and stressed#4: You forgot to make a payment

One of the biggest problems with credit cards is that it’s easy to forget to make a payment. This can be especially true if you’re going through a major change in life. Your credit won’t be damaged severely if you realize that you did miss that payment before your next due date. It’s possible you could even get your credit card company to waive that late fee – if you haven’t been habitually late. Also, you can prevent any damage to your credit score by making up that payment before it gets 30 days past due. If you have a calendar on your computer or smart phone you should put your due date on it as a recurring event – to help make sure you don’t miss any payments in the future.

#5. The due date on your card doesn’t align with your payday

When your credit card due date doesn’t align with your payday you can find yourself constantly juggling bills to make your payment on time. If this is your problem call your credit card issuer and ask it to change your due date. Keep in mind that your due dates will fall on the same day every month.

#6. You let a relative or friend use your card and he or she isn’t paying

It’s never a good idea to let someone else use your credit card but if you did and that someone isn’t paying, you’re still responsible for the charges – assuming you gave that friend or relative permission to use your card. If a person used that card without your permission you’d have to sue him or her to eliminate your liability and clear your name. You could take that person to small claims court to get back what you are required to pay on his or her behalf. If you don’t want to do this for some reason, you’ll have learned the hard way not to trust someone else with your credit card.

#7. Your credit card will no longer swipe

If you accidentally leave your credit card around some kind of a magnet for a long period of time, it can become de-magnetized. This means the information is erased from that magnetic strip on the back of your credit card and card readers can no longer process your transaction. Some cashiers will process the transaction manually. But ultimately you’ll have to call the credit card company and ask to have a new card sent to you.

#8. You can no longer afford your payments

If you charge up too much on a credit card and discover that you can no longer make the payments the worst thing you can do is to stop making them. If you do this, your account could be sent to a collection agency. What’s better is to first try to trim down your expenses so that you’ll have more room to make your credit card payments. This could mean sacrificing some luxuries for a few months until you get your balance reduced. You could also contact the credit card company and ask it to lower your interest rate or minimum payment. If none of this works you may want to get help from a credit- counseling agency. When you do this, you’ll be assigned a debt counselor who will review your debts and your earnings and help you create a budget that could make it possible for you to make those payments.

#9. The credit card company has made an error on your credit report

Credit card companies can make mistakes just like everyone. If you find inaccurate information on a credit report you can dispute it. All three of the credit bureaus have forms on their websites specifically for this purpose. However, most experts say it’s better to dispute the item in writing. When you do this, the credit bureau will contact the credit card issuer that provided the information you’re disputing and ask that it be verified. If it can’t verify the information or fails to respond within 30 days, the credit bureau is supposed to remove the item from your credit report. If this doesn’t work, you can dispute the item directly with your credit card company. If all this fails, you could complain to the Consumer Financial Protection Bureau. If you can prove that the information on your credit report is inaccurate and the credit bureau contains to report it you could sue the credit bureau.

Mobile Menu
MENU