Do's and Don'ts of Using Credit Cards Responsibly
Do you remember the first time you were approved for a credit card? Do you remember anyone sitting you down and explaining the benefits and drawbacks of having a credit card? In most cases, no one told you the rules regarding credit card usage. In fact, the average credit card debt per household is $15,956*. The following "Do's and Don'ts" of credit card usage will encourage you to have healthy spending habits that you can utilize for the rest of your life.
Don't
Do
* Calculated by dividing the total revolving debt in the U.S. ($801.0 billion as of December 2011 data, as listed in the Federal Reserve's February 2012 report on consumer credit) by the estimated number of households carrying credit card debt (50.2 million)
***The above information is provided by About.com http://credit.about.com/od/creditcardbasics/a/dosandonts.htm
Credit History
To get a glimpse of your financial future, many businesses look at your financial past. This history is contained in credit report. Your credit report determines everything from whether you qualify for a loan and the rate you'll pay on that loan, to renting an apartment and obtaining car insurance.
What Is a Credit History?
Your credit history is a financial profile. It lets lenders, landlords and employers know how you have managed money in the past and helps them decide whether or not to do business with you. This history is contained in a credit report that is kept on file by the three independent credit bureaus listed below. It may include such information as:
How promptly you have paid off credit cards and loans
How well you have handled paying other bills, such as rent and utilities
Your total outstanding debts
How much available credit you have on credit cards and home equity loans
Who Can See Your Credit Report?
Your credit report can and most likely will be reviewed by anyone planning to give you a loan or credit, such as banks and credit unions, credit card issuers, auto financing companies, and insurance companies. Your report also may be checked by landlords and potential employers. Some lenders may also use the details in your report to determine how much credit they are willing to offer you and at what rate. Anyone with a legitimate business need can access your credit report, though an employer (or prospective employer) typically requires your written consent to do so.
Beware of "Fast Fixes" For Accurate Credit Problems
If you've had any late payments, foreclosures, or repossessions, this information stays in your credit report for up to seven years. If you've filed for bankruptcy, this information can stay in your report for up to 10 years.
Some companies claim they can "fix" such problems for a fee. However, it is legally impossible to alter an accurate credit history. If you find yourself in financial trouble, contact a member agency of the National Foundation for Credit Counseling (NFCC), the nation's largest national nonprofit credit counseling network, by calling 1-800-388-2227 or visiting www.nfcc.org.
Credit Bureau Contact Information
Once a year, it's a good idea to check your credit report for accuracy, and you can do so for free through the three major credit bureaus (Equifax, Experian, Trans Union). Get your reports at www.annualcreditreport.com.
***The above information is provided by Visa®
14 Simple Financial Resolutions to Make Now
January is a month of financial strain for many who have spent beyond their means during the holiday season. What better time to make changes that will lead to a brighter financial picture than at the start of the New Year? The trick is to avoid setting unclear, overgeneralized goals that are difficult to measure or meet, like "save more" or "pay off my debt." Instead, identify a specific and measurable change you plan to make. The resolutions below may be small, but their impact can be remarkable over time. Resolve to:
***The above information is provided by Visa®
Prepare to pay back your loans before you graduate.
Student loans are as much a responsibility as any other loan a person can acquire. Student borrowers are required to repay their education loans, even if they do not complete school or cannot find a job after they leave school.
Before you take out a loan, you should take certain steps to help you avoid default, such as finding out about repayment guidelines and talking to your lender about the particular terms of a loan. Planning for repayment can help you avoid the difficulties that may come with the responsibilities of borrowing money and help you avoid default.
Planning for repayment can help you avoid problems later.
Part of your plan for repayment should include actively beginning your search for full-time employment.
Keep in touch
If you borrow, keep in touch with your lender, especially if personal circumstances change. Lenders are often willing to work with borrowers to make repayment possible and easier. You may be eligible for consolidation programs or deferment/forbearance plans.
Contact your lender if you:
Tax Benefits of Paying for College
For many students and their parents, tax season is a time of grumbling and groaning. Forms, paperwork, and the April 15 tax filing deadline can add stress to an already hectic life. However, if you're paying off student loans or paying for college tuition and fees, your higher education investment might help you in a way you didn't expect - by reducing your tax bill.
The higher education related tax benefits that students and parents may be able to take advantage of include but are not limited to:
The student loan interest deduction, which can reduce the taxable income of many student and parent loan borrowers based on the amount of interest paid by the borrower or on the borrower's behalf over the tax year.
The tuition and fees deduction, which can reduce the taxable income of taxpayers based on college tuition and fees paid during the tax year.
The American Opportunity and Lifetime Learning tax credits, which allow many taxpayers to claim a credit against their federal income taxes for college tuition and fees paid during the tax year.
Where can I get more information?
Publication 970, published by the IRS, along with the instruction booklets for Form 1040 and Form 1040A, include instructions on how the various tax benefits should be applied to an individual tax return. These publications and other useful information can be obtained at the IRS website, located at www.irs.gov. The IRS also offers taxpayers free answers to tax questions at 1-800-TAX-1040 (829-1040).
