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LaToya Irby

LaToya's Credit / Debt Blog


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Protect Your Credit From an Angry Ex

Tuesday April 22, 2014

Breakups are tough enough, but if you shared a credit card or another account with your former boyfriend or girlfriend things could get nasty.

A scorned ex-lover might seek revenge by running up the balance on your joint credit card. Or, if they have access to your account information, they could drain your bank account. Worse, with your social security number, they could open accounts in your name.

After a breakup, it's important to sever ties, especially financial ones. Sometimes that's easier said that done. Still, do what's necessary to keep your ex from ruining your credit.

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Tips to Avoid Credit Card Fraud

Friday April 18, 2014

When someone steals or uses your credit card without your permission, they've committed credit card fraud. And since the credit card is in your name, the credit card issuer will look to you to pay the charges, unless you report the fraudulent charges in a timely manner.

Dealing with credit card fraud is a nuisance that can often be avoided by being more careful with your credit card and your credit card information. For example, you shouldn't include your credit card information in an email or text message because they're not secure.

Read more: 7 Ways to Avoid Credit Card Fraud

If your credit card is lost or stolen, it's important to report it to your credit card issuer as soon as possible to reduce your liability for stolen charges. However, thieves can commit fraud with just your credit card information - the credit card number, expiration date, etc. - so watch your credit and report unauthorized charges immediately.

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Is Your Kid Ready to Be an Authorized User?

Monday April 14, 2014

Most credit cards give you the ability to add an authorized user. If you're the parent of a teenager or young adult, you might have considered making your child an authorized user to help boost their credit score and to give them access to your credit card account.

Adding your child as an authorized user on your account is a big step. If you add them prematurely, you'll suffer the consequences since the account is your name.

Make sure your child is responsible, understands the concept of money, and has a reputation for following the rules before you consider adding them to your credit card.

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The True Cost of Debt

Sunday April 13, 2014

The cost of debt goes beyond the dollars and cents you may spend on interest and fees. The true cost of debt is in the opportunity cost - the things and experiences you miss out on because you're too much in debt to enjoy them. Think grad school, vacation, early retirement.

Paying off your debt faster might let you get back to enjoying life - the way you did before debt crept in. Read What is Debt Really Costing You to get an idea of how much you could be losing because of debt.

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Debt Collector Calls to Your Employer

Friday April 11, 2014

Your financial troubles are probably on the top of the list of things you don't want your employer to know about, right up there with marital woes and other family issues. Naturally, you don't want your personal issues to negatively influence your employer's impression of your ability to perform at work. But, debt collectors  could threaten your job security if they were to contact your employer about your debt.

It's in the collector's best interest that you keep your job. Your being let go because of a debt collection would ruin any chance the collector has at getting paid. Fortunately, the Fair Debt Collection Practices Act specifically defines the situations that a collector can contact your employer and they're generally NOT allowed to let it slip that you owe a debt. Here's more information about whether debt collectors can contact your employer.

Dealing With Debt Collectors

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Bank of America Ordered to Refund $727 Million

Thursday April 10, 2014

The Consumer Financial Protection Bureau has ordered Bank of America to refund $727 million to consumers who were victims of deceptive marketing and unfair billing practices for the card's payment protection and credit monitoring services.

Bank of America joins American Express, Discover, Capital One, and Chase in the lot of credit card issuers who've been been ordered to refund millions of dollars to cardholders because of their deception in marketing add-on products.

For about two years, Bank of America representatives marketed credit card payment protection services to cardholders with an initial 30-day free period. However, the company started charging cardholders right away. Cardholders were enrolled in services immediately despite that they'd only agreed to receive additional information. Finally, Bank of America telemarketers misrepresented the benefits of the payment protection services.

In addition to misleading customers about payment protection services, Bank of America unfairly charged cardholders for its identity protection services. In this case, cardholders were billed for the credit monitoring services before the services actually began. Some cardholders were charged interest on the unfairly billed services and others incurred a fee for exceeding their credit limits.

In addition to the $727 million refund to consumers, Bank of America is required to pay a $20 million and $25 in civil penalties to the CFPB and the Office of the Comptroller of the Currency.

Previous refunds required by the CFPB for deceptive marketing of add-on products (like credit card payment protection):

In late 2013, GE Capital was required to refund $34 million to consumers for deceptive enrollment practices of its CareCredit medical credit card.

The CFPB is serious about cracking down on credit card issuers who take advantage of consumers. CFPB Director Rich Cordray says in a statement, "[...] We will not tolerate such practices and will continue to be vigilant in our pursuit of companies who wrong consumers in this market."

High Interest Rate Debts

Monday April 7, 2014

Debts with high interest rates are among the hardest to pay off, especially if they also have the biggest balances. Much of your payment will go toward monthly interest and your balance won't decrease nearly as fast as if you had a lower interest rate.

Look at a recent billing statement of what of your higher rate credit cards. Compare your previous balance to your current balance (assuming you haven't made any purchases, you'll see that your payments don't make a big dent in your debt.

You have to take a different approach with larger, high interest rate debts. The minimum payment won't be effective. Instead, you have to pay as much as you possibly can each month and refrain from making any new purchase on that credit card. Find more strategies: How to Pay Off High Interest Rate Debts

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Calculate Your Debt-To-Income Ratio

Sunday April 6, 2014

Your debt-to-income ratio is a good way to tell whether you have too much debt. The ratio tells you know how much of your monthly income goes toward debt.

The math to calculate your ratio on your own is pretty straightforward: divide your monthly debt spending by your monthly income then multiply the result by 100 to get a percentage. You can also use this debt-to-income ratio calculator by just entering the details.

If you have a high debt-to-income ratio, you can lower it by reducing your debt. The lower your monthly debt payments, the better your debt-to-income ratio.

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Correct a Forgotten Payment

Saturday April 5, 2014

Forgetting to pay the cell phone or electric bill is one thing. You usually have to be severely delinquent before you experience the effects of the missed payment. But, missing your credit card payment can have more serious, long-lasting consequences, like fees and damage to your credit rating.

If you accidentally miss your credit card payment don't just wait until the next billing statement comes to make up the payment. Instead, send the payment as soon as you notice you've missed it. Read more on how to Handle an Accidentally Missed Credit Card Payment.

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The Downside of Retail Store Credit Cards

Friday April 4, 2014

Shopping could be enjoyable, if not for the I dreaded question nearly all store clerks ask now: "Would you like to save 10% and sign up for our credit card?" It's a great day when you can make it out of the store without being pitched a credit card.

Store credit cards are relatively easy to get, which is good if you're just starting out with credit or you're rebuilding a bad credit history. But, they're not all they're cracked up to be. They have high interest rates, low credit limits, and don't help your credit score as much as you'd think. That's just a few negative things about store credit cards. Find out 7 Drawbacks of Retail Store Credit Cards to help you choose whether to keep these cards in your wallet.

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