Part of being a responsible credit card user is knowing when it's ok to swipe your credit card and when it's better left in your wallet. Being able to make this decision is key to building a good credit score and keeping yourself out of debt.
Before you swipe, the first thing you should ask yourself is "Can I afford to buy this today?" Rationalizing the purchase with future income, e.g. "I can pay it back when I get paid next month," typically shows you can't really afford the purchase.
Affordability is just one of the criteria you should use to decide whether to use your credit card. Here are seven times you shouldn't use your credit card. Have you been guilty of any of them?
Related: 10 Things to Know About Credit | What to Do With a New Credit Card | Juggling Credit Card Payments
Discover has two travel reward credit cards - Escape and Miles. Both cards have a 0% introductory interest rate on purchases and balance transfers. They also have the same APR range, based on your credit history. Miles is cheaper, with no annual fee. But Escape lets you earn more reward miles. Check out reviews of both credit cards to decide if either is right for you.
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Asset Acceptance, one of the biggest and most-complained about debt collectors/debt purchasers, recently agreed to a $2.5 million settlement to an FTC lawsuit. Asset Acceptance faced a slew of allegations including collecting debts from identity theft victims, providing false information to the credit bureaus, pursuing debts after the statute of limitations expired, and tricking consumers into restarting the statute of limitations.
As part of the settlement, Asset Acceptance is required to investigate consumer disputes over debt validity and notify consumers before placing negative information on their credit reports. Both are already part of existing law, the FDCPA and FCRA respectively.
Asset Acceptance agreed not to sue debtors over debts that have passed the statute of limitations and to inform debtors when their debt debt may be "too old to be legally enforceable that it will not sue to collect on that debt." In a statement to Business Week, an Asset Acceptance representative says they'll use the phrasing, "Given the age of the debt we will not sue you." If it's used correctly, the new phrasing will eliminate many questions over whether the statute of limitations on a debt has expired.
Asset Acceptance's settlement is the second-largest FTC settlement with a debt collector since a settlement with West Asset Management for $2.8 million in March 2011. West Asset Management was accused of repeatedly calling consumers even about debts that weren't theirs, informing third-parties of debts, ignoring written requests to stop communication about debts, withdrawing money from consumer accounts without permission, and falsely claiming consumers would be sued over the debts.
Complaining to the FTC may seem useless, but its consumer complains that drive the FTC to crackdown on debt collectors and other business that violate consumer rights. Complain to FTC at FTCComplaintAssistant.gov or by calling 1-877-FTC-HELP. Your State Attorney General is another place to lodge complaints against debt collectors and other businesses.
Source: Federal Trade Commssion
More on Dealing With Debt Collectors
Every month around this time, many people sit down with their bills and their checkbook (or their computer or iPad) and write the checks to pay the bills. With some bills, you pay the exact amount due, no questions. But with credit cards, you may wonder the best amount to pay.
Full payment is the best, but when you can't pay the full balance, you'll have to pay another amount, preferably higher than the minimum. Read How to Decide Your Monthly Credit Card Payment for a few guidelines.
