Sometimes, in the rush to transfer a balance from one credit card to another and save money, a person can leave themselves open to increased interest rates and other charges. In fact, the Consumer Financial Protection Bureau (CFPB) recently sent out a warning to credit card issuers about their deceptive offers when it comes to reduced interest or zero interest balance transfers.

The problem lies in the information, or lack thereof, given by the credit card companies to consumers, information that should inform them that by creating a monthly balance, even if it has zero interest, the interest-free grace period that they would normally get on most purchases will be lost. For people who pay off their credit card balance in full every month, that could mean the loss of significant savings.

What normally happens when a person doesn’t carry a balance on their credit card is that, as long as they pay the charges in full by the payment due date, interest on new purchases doesn’t accrue. That changes instantly when they transfer a balance from another card as, in most cases, that grace period is given up until the transfer balance is paid in full. Unfortunately, even if they continue to make payments in full on their other new purchases every month, the loss of that grace period means those purchases will start accruing interest immediately.

The CFPB has a problem with the fact that most card issuers don’t make this information clear in their promotional materials, especially those that refer to their convenience checks, balance transfers, deferred interest/promotional interest rate purchases and so forth.

The agency says that the information is missing in some cases and, in others, it’s covered by language that’s too technical for the average person or buried under volumes of legal-speak. This results in many consumers being misled into thinking that the only fee they’re going to have to pay is the transfer-related transaction, which in most cases is entirely wrong.

Richard Cordray is the director of the CFPB and, in a statement that he made announcing the agency’s warning to credit card issuers, he said that “Credit card offers that lure consumers and then hit them with surprise charges are against the law.”

What can you do to avoid paying these extra fees and interest?

Simply put, before you take advantage of any balance transfer offer, make sure you read all of the fine print so that you understand the cost and transfer fees included. If you have any questions about anything, you need to ask before you sign on the dotted line and keep in mind that, even if you pay off your balance every month, there’s a very good likelihood that you’ll be getting charged interest on purchases from the moment that you make them. Depending on how many purchases you make every month, this could actually cost more money than if you haven’t made the transfer at all.

One excellent way to avoid this problem is simply to stop using any card where you just transferred a balance until that balance is paid off. Use a different credit card or cash, and don’t forget that most promotional offers require a minimum payment that you’ll need to make in order to keep getting their promotional rate. Paying off that transfer amount during that period is in your best interest as well because, if you don’t, you’ll be facing higher interest charges on any unpaid balance.

Something else to keep in mind is that you should never make a transfer to any card that already has a balance on it. The reason is because credit card issuers are allowed by law to apply the minimum payment portion of your future payments to your promotional balance. They don’t have to apply it to the higher interest rate balance that you’re trying to pay off.

One last technique that you might want to try is simply to call your credit card issuer and ask them to voluntarily lower your interest rate so that you’ll avoid transfer fees and other costs altogether. They don’t have to do it but, in some cases, they will, and so asking won’t hurt and won’t affect your credit score either.

While US consumers rightly believe the recession has faded away there are still signs in the US Economy that there is work to be done. The latest growth figures for the first quarter of 2015 are disappointing, annualized to just 0.2% though there are mitigating reasons for that. It does bring into focus, however, the need for everyone to look at their individual finances to ensure they are on the right road. It is unlikely that interest rates will rise to any appreciable extent in the next year. That is plenty of time for everyone to take advantage of the cheap money that is available as long as they have positive and sensible reasons for doing so.

Repairs

Some households, however, are still in the process of repairing their finances after the effects of the recession. That may involve trying to improve their credit history and the resultant credit score that many traditional lenders use as their guide to whether to approve a loan application. The good news is that people can improve their history over time by paying their bills on time. In addition, negative entries on a credit history do have less and less impact on the credit score over months and years.

Online

There is another piece of good news as well, and that is that modern online companies in the financial sector generally take a different approach to lending that the traditional financial institutions. They look at the present. If an applicant has a regular income and can afford the installment payments for any prospective term loan, then their application will be seriously considered. It will generally be granted even if the interest rate charged is slightly higher than the one on offer to those with an excellent credit record.

Credit Cards

If you have had financial trouble, it is important that you take some time to look at the whole picture no matter how black it may seem. There is always someone who can help if you have a regular income. There is no doubt that some have made their financial position worse by ignoring the problem or not recognizing its extent. Credit cards are a prime example of why people have got themselves into trouble.

Even today, after all, the problems of the recession, credit card companies are looking to expand their clients offering them immediate credit. If those who sign up for a credit card use them to buy things they cannot afford, their troubles begin. They can pay off a minimum each month. Suddenly the bargain they bought takes months to pay off in full. Every month interest adds to the original cost. Stupid, isn’t it?

It highlights the dangers of a credit card and the financial mess they are capable of creating. It is easy to ignore such a problem in the early stages. Somehow the reality of having to pay back a balance does not hit until the position is far worse.

Imagine that problem multiplied several times! Many people have several cards and have found themselves with several balances with an increasing problem of paying the minimum off each every month while the balances do not diminish.

Balance Solutions

It’s time to investigate the chances of a loan that can pay off the balances, at least as many as possible. It is important to realize that a loan over a fixed term is a commitment. The most important thing from that point onward is not to fall back into using a card for credit and building up balances again. It is unlikely there will be a second chance without a dramatic change in financial circumstances.

Once you have written everything down you have taken the first step. Another obvious step is to look online for financial companies that have built up a reputation for service. The time spent learning more about what is available is time well spent. Headlines are one thing; the detail is far more important to ensure any product that you might consider is exactly what it seems. Once you have found a company that seems to offer everything you need you your future is likely to have fewer worries than your immediate past.

If you’ve got plans to get a new apartment sometime soon, your credit score will be one of the criteria that they check before many apartment complexes will allow you to sign up and move in. If that’s you, and your credit isn’t as good as it could (or should) be, securing a new apartment might be a problem.

Lucky for you we’ve put together a number of things that you can do to quickly increase your credit score so that you can get the apartment you need with the least amount of hassle. Enjoy.

The first is simply to apply for a new credit card. If you don’t have one, you definitely should consider getting one because, when used wisely, it can help you build your credit and raise your credit score as well. Keep in mind that it is best to simply open one credit card, not several.

Using less than 20% of your credit limit is also an excellent idea. The fact is, even if you pay on your balances in full every month to avoid interest, keeping your credit utilization too high will negatively affect your credit score. Keeping it at around 20% is good but if you can lower it to 10% that’s even better.

One of the ways to do this is simply to stop using your credit card pay for everything, and use it more strategically. For example, instead of paying one lump sum for every bill every month, you can pay several payments throughout the month.

Paying your bills on time, every time, is extremely important as well if you want to quickly increase your credit score. The fact is, even a small amount of negligence like paying your gas balance a few days late can have a negative effect on your score. You might want to consider setting up an automatic deduction for your monthly bills so that you don’t have to worry about forgetting them. If you have and use a budget this will be much easier because you will know that you have the money you need to cover your rent and bills, and also what’s left over for “unnecessary” purchases.

Of course if you don’t actually know what your credit score is and what your credit report has to say about you, it’s definitely time to get your free credit report from the ‘Big 3’ reporting agencies, Experian, TransUnion and Equifax. You can get one free from each every year by federal law. Knowing how to read your credit report is vital in order to being able to make sure that there are no mistakes on your report, and that you haven’t been the victim of identity theft.

If it has mistakes or errors, cleaning up your credit report is extremely important, especially if you want to rent an apartment. If you have negative notes from collection agencies or utility companies but they are older than 7 years, you should immediately request to have them removed. Disputing errors is also an obvious task that you need to take care of because these can lower your credit score.

And there you go, some excellent advice about quickly increasing your credit score so that you can more easily rent an apartment. Best of luck apartment hunting!

Credit scores are important if you want to be able to achieve success in life. Usually, people have average credit scores; however, there are some strange cases of low credit scores. If you have ever wondered what could cause someone’s credit score to drop, you will find out today in this article.

Disputing a Credit Card Bill

When your credit report is not correct, you have the right to dispute it. However, even though you have the right to do this, it may not always be a wise choice. For example, if you are filing a dispute for a credit card that has a zero or low balance you will hurt your credit utilization rate.

Paying of old Collections

Many people think that paying off collections will result in their credit score increasing. However, if you pay off an old debt, you are at risk of having it added to your credit report even if it was not initially there. It can come with a payment status that triggers a credit score drop or it may reactivate the legal statute of limitations. Neither of these possibilities is good for your credit rating or your finances.

This is why real estate agents will advise against paying off old debts when you plan to apply for a home loan.

Purchasing a Motorcycle

For one reason or another, you decided to get a motorcycle. However, you are unaware of the negative effects that come with the new set of wheels.

Motorcycle loans are known for being reported as revolving credit. This makes it looks like you have a large amount of credit card debt. Therefore, your credit utilization rate skyrockets and your credit score plummet as a result.

To reduce the chance of negative impacts put down a larger amount of money upfront.

Using a Business Credit Card

At one point, your business credit never affected your personal credit. Those times are gone and now if you use your business credit card frequently, it can lower your personal credit. Having a high balance on your card will increase your utilization rate, which causes your credit score to drop.

Closing Thoughts

Maintaining good credit is hard and many of the things that will lower your credit score are encouraged to those trying to fix their credit. Before doing anything drastic in the financial department you always have to take a moment to step back and think how your action will affect your credit.

There are two facts about credit that should really be written in stone. The 1^st is that it’s incredibly easy to ruin your credit. The 2^nd is that rebuilding your credit can be extremely difficult and time-consuming.

In fact, if more Americans realized how hard it is to rebuild their credit, and the damage that bad credit can cause to their financial life, you can bet that much fewer would rush out to use their credit cards.

If you’re keen on avoiding credit problems, most of which will stick with you for at least seven years, the 6 mistakes below should be avoided like the plague. Enjoy.

Mistake #1: Getting a credit card if you’re not prepared to use it correctly

Many consumers dig themselves into a deep hole of debt because, simply put, they aren’t ready to use credit and credit cards correctly. If you don’t really understand how money works, haven’t set up a budget and don’t yet have a steady income, it’s probably not a good time to get a credit card.

Mistake #2: Getting too many credit cards

If you’re a beginner with credit it’s probably a good idea to simply have one credit card until you’ve had practice in using credit, learn some basics about how money works and, frankly, are responsible enough to handle multiple credit cards. Keeping track of balances, payment amounts, the available credit that you have and more than one due date for all of those credit bills can make even experienced consumers a little confused.

Mistake #3: Taking on too much debt at one time

No matter how much money you actually earn every month, whether it’s $2000 or $20,000, if you have more bills to pay than money coming in every month you’re going to dig yourself into a hole of debt, and quickly. You’d be absolutely amazed at how many people make an excellent living and are still deeply in debt simply because of this one mistake.

Mistake #4: Not facing, and solving, financial problems

Many people make like an ostrich when facing financial problems and stick their head in the sand, but the only result that gets you is more debt and sand all over the place. Ignoring your financial troubles will only allow them to get worse, so face them, correct them and move on.

Mistake #5: Treating non-credit payments differently

While credit card amounts and loans like mortgages and automobile loans are reported each month to the big 3 credit bureaus, payments like utilities, Internet and cell phone bills aren’t. Many consumers make the mistake of neglecting these payments for this very fact but, if you default on one of these types of payments, it will definitely impact your credit, especially when a collection agency is called in to help collect your debt.

Mistake #6:Forgetting to adjust your spending habits after a major change in your life

If you move to a new city, have a baby, get a raise, get married or lose your job, all of these situations will affect your finances. Some will be positive but most will be negative and, if you don’t adjust to those changes, reevaluating your spending habits in the process, you might find yourself in a world of trouble, credit-wise.

If any of these mistakes are troubling you and you are looking for advice or answers, send us an email or leave a comment and we’ll get back to you with answers.