Ever charged your rent or groceries to your credit card. You’re not alone. It’s a common path to high-rate credit card debt. Credit card debt grows more costly as short-term interest rates rise; an excellent reason to get rid of it quickly. Don’t use your credit card to buy anything you can’t pay off at the end of the month. That applies to everything from groceries to vacations.

Consumers ages 20 to 29 carry an average $5,781 in revolving debt — which includes credit card loans — a 24% rise from five years ago, adjusted for inflation, according to an analysis by Experian of the credit records of 3 million twentysomethings for USA Today.

Twentysomethings “are one of the groups that we’re becoming more concerned about,” says Nick Jacobs, a spokesman for the National Foundation for Credit Counseling, which counsels 40,000 twentysomethings each year through its 115-member debt-counseling agencies nationwide. “They’re out there living on their own and have a whole new set of obligations.”

It’s vital to have a plan to cut credit card debt. Some suggestions:

1. Limit credit card use.
Eliminate the temptation of credit cards; cut some cards up, keep only the cards you really need. You could also close credit card accounts. Generally, you should think twice before closing older accounts, though, because doing so could hurt your credit score. This is especially true for young adults who lack a long credit history. (check out our recent article on how closing credit cards can effect your rating)

2. Negotiate lower credit card rates.
Young credit holders (early 20’s) often pay higher card rates than older adults because they’re considered a higher risk since they have limited financial experience and little payment history. it’s worth the time to call your credit card issuer. You can often lower your interest rate by a few percentage points and help you emerge from debt more quickly.

3. Pay high-rate to low-rate credit card debt.
If you have debt on more than one card you should tackle the highest-rate credit cards first and heaviest.  This usually cuts your debt load faster. Monitor your accounts closely, though, because credit card rates change all the time. However you tackle credit card debt, make sure you still pay at least the minimum on other accounts.

4. Pay credit card bills on time.
On-time payments have EVERYTHING to do with getting out of debt. Many banks adjust interest rates on your credit cards by looking at your payment history not only with them but with other creditors. Consider setting up automatic transfers from your checking or savings account to your credit card issuer to make it easier to pay on time.

5. Beware of low-rate loans to pay off credit cards.
Financial experts say they’re seeing more signs of young adults paying off high-rate cards with lower-rate loans, such as home equity credit lines and student loans. Paying off credit card balances with mortgage debt can be risky; you’re putting up your home as collateral. If you’re considering paying off your credit cards with student loans, just be aware that student-loan debt can’t be discharged if you ever have to file for bankruptcy. What about those low-rate balance-transfer offers on credit cards? Read the terms carefully. Some banks charge 3% of the amount transferred. On top of that, if you pay late or spend over your credit limit once, the interest rate could soar to 30% or more. You should also be building up three to six months of emergency money. Saving money may seem to thwart the goal of paying off debt as quickly as possible, but if you don’t have this cash, and your car breaks down or you have unexpected health care expenses, you’ll be tempted to pay with plastic.

Having and using credit cards helps build credit …right? In most cases this is true, obtaining credit cards helps to build your credit rating based on your ability to get and maintain credit from various sources. However, Selena Maranjian of Motley Fool fills us in on some of the details that may not be so obvious, and that may infact hurt our credit score.

Focus on the financial world, and it’s easy to learn something new every day. Here’s what I learned, thanks to a Bankrate.com article by Kristin Arnold: It seems that there are credit cards with no borrowing limits, and that using them can damage your credit rating. Yikes!

Arnold offered this eye-opening example: “Anthony Citrano, a partner in a Cambridge, Mass., public relations firm, opened a Citibank World MasterCard account in November of 2004. Within two months, his credit score dropped 50 points at Experian and 35 points at Equifax.”

So what’s going on here? Well, the main problem is tied to how credit scores are calculated. One major factor, which makes up nearly a third of your score, is “credit utilization,” which measures the percentage of available credit that you owe. If your card’s limit is $12,000 and your balance is $4,000, your credit utilization is 33%. (The lower the better, when it comes to credit utilization numbers.) Interestingly, if your card has no limit — which many card users would consider a good thing — then the metric can’t be calculated, and it isn’t there to boost your score. Some card companies are getting around the problem by using your largest recent balance as your limit, but this is an imperfect solution. For one thing, not all card companies are doing this, and for another, the numbers won’t always work in your favor. If you’re a modest charger with a highest balance of $5,000 and a current balance of $3,500, your credit utilization will be a relatively steep 70%.

Learn more in our Credit Center, which features some surprisingly interesting info about the credit card industry. Being smart about credit can save you lots of money. And speaking of credit cards, check out our Fool credit card, which is so snazzy that it often serves as a conversation piece. Use it responsibly, and it can serve you well.

Whether you’re looking for credit approval or to improve your credit rating, Credit Report Pro has a solution thats perfect for you.

Adrian Dunbaker
 
Credit card debt consolidation allows you to pay your current debts in 3-6 years and more card consolidate credit debt information will help you. Under a debt consolidation plan, terms and conditions change. The purpose of debt consolidation is to speed up your paying time and at the same time makes lower monthly bills.

Always make sure that the new cost of the consolidated loan is truly less than what you are currently paying for to the various creditors. Not getting the lowest available interest rate has always been a problem faced by consolidation loan applicants. Be sure that there is something to secure the loan like your house for example.

Calculate the interest and the fees of all your existing accounts to see the total payments you’re making at present. After computing this, compare the figure with the consolidation loan amount. This will determine if you’re making a better choice or not.

(read more…)

This is another reminder of how important it is to be vigilant in your awareness of your credit status. Many credit report mistakes are the result of errors in reporting etc. However, credit card fraud can wreak havok on your credit report, and if left unaddressed can ruin your credit perminantantly.

This story from the Associated Press relates the recent arrests of a suspected credit card fraud ring operating out of Mardid, Spain, but perpetrating the fraud on US credit holders.

Madrid — Spanish police, working with U.S. authorities and Swiss police, arrested 23 persons on suspicion of international credit card fraud, the Interior Ministry said in a statement Wednesday.

Investigators believe the suspects, from Canada, China, Malaysia, Singapore and Spain, stole financial and personal information from U.S. citizens and companies and then copied it onto fake cards of “exceptional quality.”

According to police, suspected ringleaders in Singapore masterminded the theft of information — mainly from one U.S.-based company’s files — by enlisting computer hackers in Russia and Ukraine.

(read more…)

Banks use credit scores(from your credit report), so do insurance agents and even employers. But if you don’t know what’s on those reports, you could be in for a shock because the chances are your credit report is wrong. 

Flink talked with a woman who sued one of the credit bureaus and won. A judge limited what she could say about the case. The woman, who asked only to be identified as Annie, should have had a great credit score. She paid off a house and her car. But according to the credit bureaus, Annie did not even exist. Instead, she and another woman with horrible credit were made into the same person.

(read more…)

Clean Credit Reports, your credit report contains information about where you work, live and how you pay your bills (On time or not). It also may show whether you’ve been sued, arrested or have filed for bankruptcy with in the last 10 years. Companies called consumer reporting agencies (cra) or credit bureaus compile and sell your credit report to businesses all over the world.

Clean Credit Reports, many financial advisors suggest that you periodically review your credit report for inaccuracies or omissions. This could be especially important if you’re considering making a major purchase, such as buying a home. Checking in advance on the accuracy of information in your credit file could speed the credit-granting process, clean credit is a must. (read more…)

 1. Deleting Errors in 48 Hours:

This is the absolute fastest way to correct errors on your credit report and raise your credit score. However, it can only be done through a mortgage company or a bank. If you apply for a home loan and find errors on your credit report, request the loan officer to conduct a Rapid Rescore. But don’t mistake it for the credit clinic tactic of multiple dispute letters. The Rapid Rescore strategy requires proper paperwork. You need proof that the item is incorrect. It must come from the creditor directly. For example, a letter stating the account is not your account, a letter stating the account was paid satisfactorily, a release of lien, a satisfaction of judgment, a bankruptcy discharge, a letter for deletion of collection account or any relevant evidence. This is the same documentation a bank or mortgage company would require for the credit accounts anyways. The difference is, now you can improve your credit score and receive a lower interest rate. The results are not guaranteed and will run you about $50 per account.

(read more…)

There are millions of consumer credit reports on file from mainly three major reporting bureaus which include Trans Union, Experian, and Equifax. These credit gathering agencies store huge amounts of data about every person that takes out a loan, credit card, or any other line of credit. Information is reported to these credit bureaus when you apply for credit, apply for some jobs, or even apply for an insurance policy.

Because of the huge amounts of data being gathered and reported there is a lot of room for errors. Credit Repair is a way of disputing or correcting these errors made by credit bureaus and creditors. Credit Repair can also be a way of optimizing your credit report or credit score.

Disputing, correcting and deleting erroneous negative accounts on your credit report is very important to your financial well being. The better your credit report the better your credit score. The better your credit score the better the interest rates you will be offered. For example: A 30 year home mortgage of $100,000 will cost you almost $25,000 more from just 1% of interest! This 1% more of interest could be from only one late payment on your credit report!

(read more…)

There are millions of consumer credit reports on file from mainly three major reporting bureaus which include Trans Union, Experian, and Equifax. These credit gathering agencies store huge amounts of data about every person that takes out a loan, credit card, or any other line of credit. Information is reported to these credit bureaus when you apply for credit, apply for some jobs, or even apply for an insurance policy.

Because of the huge amounts of data being gathered and reported there is a lot of room for errors. Credit Repair is a way of disputing or correcting these errors made by credit bureaus and creditors. Credit Repair can also be a way of optimizing your credit report or credit score.

(read more…)