Credit Report

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Credit Card Companies want to make money. How can you be in control and stay in control: You might have considered scaling back your credit card use in light of the recession, layoffs, and general uncertainty about the economy. Your credit card company doesn't want you to. Did you know that during the holiday season, consumers were expected to rack up $121.4 billion in credit debt? The following are things your credit card company wants you to do to make them richer: DON'T do these things and you'll be richer for it. 1. Pay Late. Go ahead, they say, let your card bills slide for a few days past the due date. First you'll pay as much as $35 in late fees. Second, if you pay late more than once in six months, the issuer will raise your interest rate. Not only that, but other credit cards monitor your payment history. If you exhibit a habit of paying late, your interest rates on other cards might also increase. Fight back: mail your checks as soon as you get the bill. If your rate gets hiked but you've improved your payment history, call your provider and ask for a lower rate. 2. Pay the minimum. Credit card companies love people who pay the minimum: it stretches out the debt forever since the minimum payment doesn't cover the interest due on the card. An example: if you spent $1150 this holiday season on a 14.4% credit card and only paid the minimum it would take 8 1/2 years to pay off the debt--the credit card company would make $600 in interest off of your loan. Fight back: pay as much as you can each month, and don't be swayed by the minimum. If you frequently pay the minimum, seek out a card with the lowest interest rate. 3. Pay most of your full balance every month. Many people figure they pay less interest if they pay, say, $900 of a $1000 balance. Chance are they are wrong. If you carry over any balance, you'll likely pay interest on the full balance on your card during the month. Some card companies charge interest based on your average balance over the past tow months, others on the highest balance you had during the month. Fight back: if you can, pay in full as early as possible. 4. Pay late during a special introductory period. If you're late, that 2% interest rate will balloon to double digits. Fight back: pay on time. 5. Go over your credit limit. Not only will that trigger fees of $30 or more, it can also affect your credit record. Fight back: call ahead to increase your credit line if you really need it. If you receive an overage fee, call your credit card company to see if they'll remove it as a courtesy since you informed them. 7. Use your credit card at the ATM. Credit card withdrawals at the ATM are treated as cash advances so they carry the higher interest rate. In addition, many cards tack on a fee for using the card. Because cash advances begin accruing finance charges immediately, even if you normally pay in full every month, once you use the ATM any new purchases will be subject to interest fees. Fight back: if you can't pay in full, call to see if you can arrange to pay back the advance separately. Find out what you need to do to be sure your payments are credited appropriately.

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