Read Your Billing Statement Inserts
A lot of people simply throw away the extra papers that come with credit card billing statements, but many times that's where your interest rate and credit limit notifications appear. Make sure to read everything that comes with your billing statement. Even double check your interest rate and credit limit on your actual billing statement so you'll be aware of any changes.
Transfer Your Balance
You can respond to interest rate increases and credit limit cuts by transferring your balances to a credit card with better terms. Unless you have an excellent credit score, low introductory rate balance transfer credit cards may be difficult to find. You may be able to transfer credit card balances to one of your existing credit cards that has a lower interest rate or higher credit limit (or both).
Dealing With a Job Loss
Rising unemployment is an effect of the economic crisis as a whole. The country is experiencing the highest unemployment rate in more than a decade and more jobs are being cut every day. Outstanding credit card debt can be difficult to manage when you're jobless, but you can keep your credit score intact by continuing to make at least minimum credit card payments and avoiding new credit card purchases.
Watch Out for False Promises of Help
There is no shortage of ads made by businesses who claim to be able to help you improve your credit or get out of debt or even both. The truth is many of these companies will take your money and leave you with just as bad, if not worse, credit than when you started out.
Debt settlement, debt negotiation, debt consolidation, and credit repair companies are a few of the businesses to watch out for. Seldom will any of these actually help you. There are legitimate credit counseling agencies, but you should be careful when choosing one because bad apples are out there.
- Debt Management Company Watchouts
- The Dangers of Debt Settlement
- 7 Ways to Spot a Credit Repair Scam
- How to Choose a Credit Counseling Agency
- Do-It-Yourself Credit Repair
Know Your Credit Score
Check your credit score before applying for a loan or credit card. These days, a good score is 720 vs. the 620 cutoff in the days of easier credit. If you don't have a good credit score, delay your applications until you've had an opportunity to improve it.
Get a copy of your free credit report and review it to make sure there are no errors bringing down your credit score. Bringing any delinquent accounts current and paying down high credit card balances will improve your credit score and your chances of getting loan or credit card approval.
Can Anyone Dodge the Credit Crisis?
Consumers who don't carry a credit card balance will be least affected by the effects of the credit crisis. Without a credit card balance, higher interest rates mean little since there won't be any finance charges to worry about. A credit limit cut could hurt depending on whether there are other credit card balances and the amount you charge on your credit card monthly.
Go Back to Learn What Happens in the Credit Crisis