Avoid credit card traps this holiday season

Here are some tips from Americans for Fairness in Lending on credit during the holiday season.

“With holiday gift-buying in full swing, college students are at even greater risk than usual of falling into traps set by credit card companies using predatory lending practices,” said Jim Campen, Executive Director. “Americans for Fairness in Lending is getting out a holiday season tip sheet for these students, already a favorite target for marketers of credit cards. We are also circulating a fact sheet on college students and credit cards.”

  1. Don’t get tricked, trapped or suckered into a card with bad terms. If you want a credit card, get one with a long-term low interest rate (APR). If you get a low introductory rate, chances are it’ll start at 0% and then jump to 20% with one almost-on-time-but-didn’t-quite-make-it payment. Still want a credit card? Just know what you’re in for…
  2. Once you choose a card, don’t let your guard down. Credit card companies are notorious for changing rules and playing GOTCHA. Look through those mailings they send…they may include a nasty change in terms.
  3. Pay your bill on time. Better yet, pay it several days ahead of time. If the due date is on a Sunday and your payment (duh) arrives on Monday – you’re late! Don’t laugh, this is REALLY common. And when you’re late – see (1) above, your interest rate jacks up.
  4. your bill in full. Whenever possible. And as quickly as you can.
  5. Do not go over your credit limit. And set the credit limit as low as possible. Don’t be fooled – credit card companies LOVE to give you a credit limit you can’t afford.
  6. Stay as far away from a credit card ‘cash advance’ as you can. The interest rate on cash advances is MUCH higher and credit card companies apply any payment you make to whatever else you owe first. That cash advance hangs around unpaid and with increasing interest until you DO pay your bill in full. Did we already mention that they’re looking to get you?
  7. Ignore those in-store “15% off today if you sign up for our credit card” offers. You’ll pay back what you saved and then some REAL fast.
  8. Carry only one card. Less confusion. How many companies do you want abusing you at once?
  9. If you do get into credit card debt, get help right away. Don’t wait until it gets worse. Try the Consumer Action Help Desk at http://www.consumer-action.org/helpdesk/.
  10. Remember your other option: CASH

Also, college students and recent grads, feel free to download this PDF from AFFIL.

Blast is The Online Magazine

In Culture on December 20, 2007 at 00:00

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