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LaToya Irby

LaToya's Credit / Debt Blog

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What Happens if You Skip a Collection

Friday May 30, 2014

You may be less than enthusiastic about paying a collection account. However, it could be in your financial best interest to pay the account (if it's yours, of course) and be done with it. As long as the debt is outstanding, you could potentially dodge debt collectors for ever.

Think about the consequences of not paying a collection before you rule out the option. For example, worst case scenario, the collector could sue you, get a judgment, then ask for permission to garnish your wages. It could happen, no matter how much or how little you owe.

Related Articles: Your Rights With Debt Collectors | 5 Reasons to Pay a Collection | Remove Collections From Your Credit Report

Debt Collectors and the Do Not Call Registry

Saturday May 24, 2014

I've read consumers complaining about debt collectors calling them even though their number has been listed on the National Do Not Call Registry. Unfortunately, these people end up thinking the law isn't working, when that's not the problem.

The National Do Not Call Registry was created to stop calls from telemarketers. The Federal Trade Commission (FTC) defines a telemarketer as someone who makes or receives calls to or from a customer to get that person to buy good or services or to make a donation (Telemarketing and Consumer Fraud and Abuse Prevention Act). The FTC further defines a debt collector as an individual or business that collects or attempts to debts (Fair Debt Collection Practices Act). By definition, a debt collector isn't a telemarketer and wouldn't fall under jurisdiction of the National Do Not Call Registry.

When the National Do Not Call Registry was established it didn't include any of the following:

  • calls from businesses that you already have a relationship with
  • calls for which you've already given written permission
  • calls that aren't commercial and don't include unsolicited advertisements
  • calls made by or on behalf of non-profit organizations

When you signed up for a credit card or loan, you most likely gave permission for the bank to use a third-party collector to collect any delinquent debt from you. So, ultimately, you gave permission for the collectors to call you to collect the debt from you and signing up for the national do not call list won't stop calls from debt collectors.

If you wish to stop debt collector calls, you should send a written cease and desist letter to the collector stating that you no longer wish to be contacted. Aside from paying the debt, that's the only way to get a debt collector to stop calling you.

Dealing With Debt Collectors:

When Your Adult Kids Ask For Your Help

Thursday May 22, 2014

A student in a budgeting class I was teaching asked, "What if your adult children are breaking your budget?" I was talking about identifying areas of consistent overspending and this person had identified theirs, but was understandably torn on how to handle it.

For many parents, the desire to help their adult children never goes away, even after the child has grown up and is technically on their own. No matter how much you want to lend a helping hand (or a few hundred dollars), you have to be careful about helping your adult children with their debt or other expenses, especially if it means hurting yourself.

Read: Should You Pay an Adult Child's Debt?

What do you think? How much help should parents lend to their adult children?

What To Do When You Spot Unauthorized Charges

Saturday May 17, 2014

One of the most important reasons to read your credit card billing statement is so you can quickly spot any unauthorized charges. The longer it takes to recognize and report unauthorized credit card charges, the less likely it is that your credit card issuer will remove the charges from your statement.

If you report unauthorized charges quickly, i.e. in less than 60 days, your liability is legally reduced to $50 or less. However, if you wait longer than that, you may end up liable for the charges. Make sure you know the right way to handle unauthorized credit card charges.

The only foolproof way to avoid unauthorized charges is to not have a credit card. Still, there are ways you can prevent credit card fraud such as keeping your credit card in a safe place and never giving your credit card number to someone you don't trust, especially to someone who calls or emails you saying they're your credit card issuer.

Image © Peter Cade/Getty Images

Can 18-Year-Olds Get Credit?

Thursday May 15, 2014

I got my first credit card at age 18, but that was way before the CARD Act came into the picture. A credit card issuer called me. I made the application over the phone and in a few weeks, I got a credit card in the mail. It was way too easy.

Now, credit card issuers have stricter requirements for giving credit cards to young adults. For example, if you're under 21, the credit card issuer can't send pre-approved offers and they have to get a written application before they can give you a credit card. The rules are intended to protect you from credit card debt.

Qualifying young adults can still get a credit card at 18. It's easier if you have a job because you'll need a co-signer if you don't. A prepaid card is a debt adverse alternative if you don't qualify for a credit card yet.

Related:

Get a Free Credit Report When You're Turned Down for Credit

Monday May 12, 2014

Did you know you're entitled to a free credit report when you have an application denied because of information in your credit report? You have 60 days to order this free credit report so you have to act quickly.

Now, some lenders will send a free credit score when you're denied or approved with less favorable terms.

How to Get a Free Credit Report When You're Turned Down For Credit

More Ways to Get a Free Credit Report

Photo: © iStockPhoto/Alex Kalmbach

Understand Your Card's Promotional Rate

Monday May 5, 2014

Some of the most attractive credit card deals are the ones with 0% APR promotional rates. Some credit card issuers offer the promotional rates on balance transfers only and others apply the same low rate to purchases and balance transfers.

As the saying goes, all good things must some to an end. Introductory rates only last a certain amount of time, at least six months, but sometimes longer. If you sign up for a credit card with a 0% rate, it's important that you know when the rate ends, especially if you sign up for a card that backdates interest if the balance isn't paid by the end of the promotional period.

Before you take advantage of a 0% or other low introductory offer, make sure you understand how promotional rates work. Otherwise, the promotion may not be beneficial.

Keep in mind that offers are subject to approval and approval is based on your credit history, income, debt, and other factors. People with excellent credit typically have a better chance at qualifying for the best rates. Credit card issuers also change their offers, so make sure you review their site for the current pricing information.

Be Smart With Credit Cards While Dating

Thursday May 1, 2014

Few things are as exciting as a new romance. But, as you may know, the euphoria of budding love may be so overwhelming that your decision making is impaired, e.g. you may spend more money dates than you know you can really afford to.

While you're enjoy dating, don't forget to be smart about your finances, particularly your credit. One of the biggest Don'ts of Credit and Dating is not using your credit card to impress the person you're dating. Think about it: is it really that impressive that you're able to borrow money? Will it be as impressive when you're struggling to pay it back? Will the debt make you resent the object of your affection?

The person you're dating may last or they may not last. The credit decisions you make while dating will definitely last. Make sure they're good ones.

Managing Credit & Relationships

Image © White Packert / Getty Images

Building Your Child's Credit Score

Wednesday April 30, 2014

Thanks to the ubiquitous use of credit scores, today's young adults might have a harder time getting started in the real world without a good credit score. And as a concerned parent, you probably wonder what you can do to give them a headstart.

Start teaching your child the basics of credit early, little by little, as soon as they're old enough to understand. Even basics like "Always return what you borrow" and "Never spend all your money" help instill good credit habits in young ones.

You can help your child build a good credit score, but be careful that you don't do it too soon and that you don't put too much of your own credit on the line.

Help your child open and use a bank account to establish a bank history. A positive bank history won't establish a credit score, but an relationship with a financial institution may come in handy when it's time for the first credit card.

After that, follow these tips on how to help your child build a good credit score.

Image © DreamPictures/Getty Images

When to Check Your Credit Report

Sunday April 27, 2014

Certain businesses check your credit report to make a yes or no decision about applications you make. For example, you can almost guarantee your credit report will be checked when you apply for a credit card or loan.

You can improve the chances of getting your application approved by checking your credit report before you put in credit-based applications. This way you have time to clean up your credit if it's necessary. Read When to Check Your Credit Report to see the specific times you should check your report.

More on Credit Reports:

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