You're Not a Grown-Up Until You Have a Credit Card. Here's Why

Category: Credit Card Debt
Published: Monday, 29 February 2016
Written by Super User

A lot of people hate credit cards, and for good reasons. They make it easy to overspend and end up in very expensive debt. If youve had the experience of paying off credit card debt or watched someone struggle through it, perhaps youve come away from it thinking, Im sticking to cash.

That seems to be the mindset of younger consumers. Facebook analyzed financial conversations, conducted surveys and reviewed audience data of users ages 21 to 34 and collected the findings in a white paper titled Millennials + money: The unfiltered journey. According to the paper, the majority of millennials (57%) prefer to use cash or debit cards instead of credit cards, and the generation seems greatly attached to the goal of living debt-free. They were asked to define financial success, and 47% said it was to be debt-free. Their most common financial priority (43%) is to pay down debt.

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Point taken. Millennials dont like debt. Thats likely a huge reason theyre relying on cash and debit cards for their everyday purchases.

But dismissing credit cards could be a big mistake for young consumers, and they might not realize why. Nearly a third (30%) of millennials say they are not sure how credit cards could be helpful, the Facebook paper said. Well, heres how.

You Can Build Credit

You dont need credit to participate in the economy and live happily, but it can make things a heck of a lot easier. Your credit rating comes into play with big financial decisions, like buying a house or car (unless youre only using cash), but it affects a lot more than that. Bad credit or no credit could make it harder or more expensive for you to rent housing, set up utilities, get a cellphone or get insurance. It could even affect your job prospects. There are a lot of situations in which a good credit score comes in handy.

But how do you get a good credit score? One way is to use a credit card responsibly. You can start with a secured credit card (weve reviewed the best secured credit cards here) or ask a close friend or relative to co-sign your card application. Try to use very little of your available credit and make the payments on time. Those two things are the foundation of a good credit score.

You Dont Need to Go Into Debt

The interest rates on credit cards tend to be much higher than they are on other credit products, like personal loans, auto loans or mortgages. That being said, you can use a credit card without ever having to pay interest. In other words, you can improve your credit score without debt.

If you pay your credit card bill in full every time its due, you can take advantage of whats called a grace period -- the time between when you make a purchase and actually take the money from your bank account to pay for it. During that time, youre technically borrowing money from your credit card issuer, but the grace period allows you to borrow that money without accruing interest on it.

On one hand, its a great tool: Youre building credit without going into debt. But be careful: If you miss a payment, you can lose your grace period, and your credit card issuer can start charging you interest for the outstanding balance. To make debt-free credit card use work for you, you need to pay very close attention to how much youre spending (so you can cover the bill) and make sure youre paying bills on time.

Credit cards can be both helpful and hurtful, which is why some people take the cautious route and avoid them. Unfortunately, that can make things more challenging for you at some point. This isnt to say everyone should have credit cards, but if you want to minimize the challenges of major adult milestones like buying a home or new car, you might want to give them a (careful) try to build your credit. You can check your progress and see two of your credit scores for free every month on Credit.com.

More on Credit Cards:
  • Credit.com's Expert Credit Card Shopping Tips
  • How to Get a Credit Card With Bad Credit
  • An Expert Guide to Credit Cards With Rewards

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COA dismisses credit card debt appeal

Category: Credit Card Debt
Published: Sunday, 28 February 2016
Written by Super User

The Indiana Court of Appeals dismissed a womans appeal of a default judgment entered against her regarding credit card debt because she did not file an Ind. Trial Rule 60(B) motion for relief.

Carrie Greer owed Discover Bank approximately $15,000 in credit card debt. The company had the Morgan County Sheriffs Department serve her with copies of the summons and complaint, but she did not appear or otherwise answer the complaint. After she received a copy of the default judgment against her in the mail, she requested a stay of the default judgment to pursue an appeal. The trial court granted the motion.

Greer maintained that she was not adequately served with the summons and complaint, so the default judgment against her is void. Discover Bank countered that she did not properly preserve her arguments for appellate review because she did not first file with the trial court a Trial Rule 60(B) motion for relief from judgment.

Since she did not, her appeal is not properly before the Court of Appeals, Judge Edward Najam wrote in Carrie A. Greer v. Discover Bank, 55A01-1509-CC-1488, citing Siebert Oxidermo, Inc. v. Shields, 446 NE2d 332, 337 (Ind. 1983).



Credit card 'reforms' trap Aussies in debt longer

Category: Credit Card Debt
Published: Sunday, 28 February 2016
Written by Super User

The average bad marriage lasts 12 long years, says the Australian Bureau of Statistics.

The average bad debt - were talking credit cards here - endures for a painful 15 years longer.

Yes, few people consider taking out a bigger credit-card commitment than tying the knot but just putting in the minimum can mean double the pledge on the former.



Michelle Singletary: Retirement is no time for debt

Category: Credit Card Debt
Published: Friday, 26 February 2016
Written by Super User
WASHINGTON #x2014; We like to daydream that our senior years will be not just a retirement from long work hours, awful commutes and bosses who get on our nerves, but a respite with fewer financial worries.
Increasingly, however, seniors are carrying into retirement a burden thats just too heavy. Too many seniors are retiring with a lot of debt or accumulating debt after they leave the workforce.
The National Council on Aging looked at debt among seniors, and its survey results are troubling. Professionals who work with seniors were asked questions about their clients debt load and how it impacted their economic security.
The councils report, released this week, found that debt is a major issue especially for seniors who are in poor health and already struggling financially.
Living on a fixed income can make it difficult to budget adequately to leave a cushion for emergencies, the report said. As such, unexpected costs #x2014; an unforeseen hospitalization, a vehicle requiring repair, or even emergency veterinary care for a sick pet #x2014; can plunge seniors into unmanageable debt.
Fifty-one percent of the surveyed professionals said they frequently deal with seniors who have overwhelming medical debt, and 36 percent said they see seniors with unmanageable, overdue utility charges. Almost 30 percent said they frequently see seniors with burdensome credit card debt.
We know from various other surveys that American households have been piling on debt. And unfortunately, that trend has not escaped the senior population. The Federal Reserve Boards Survey of Consumer Finances found that, among older adult households with debt, median total debt increased from $18,385 in 2001 to $40,900 in 2013, according to the council report.
One in four senior households with credit card debt had a balance of at least $7,200 in 2013. To some of you this may not seem like much. But seniors are racking up debt at a time in their lives when theyre likely to be on a fixed income. They cant rely on raises or job-hopping for better pay to help dig them out.
In 2007, only 0.5 percent of senior households had taken out payday loans. By 2013, it was 2.2 percent. With payday loans, borrowers give lenders postdated personal checks or authorize an electronic funds withdrawal. The loans are supposed to be paid back quickly: by the time the loan recipient is paid again or gets a benefit check. But customers can spend months trying to pay back the money, rolling one loan into another #x2014; and amassing hundreds of dollars in fees. I wouldnt want to see a single senior end up on this type of loan hamster wheel.
Heres why all this matters. When seniors cant make ends meet, they start to make financial compromises, said Maggie Flowers, the National Council on Agings associate director for economic security. She added that some professionals who were interviewed work with seniors who cut their medication dosages to save money. Others cancel doctor appointments. They miss rent or mortgage payments. They dont make home repairs. They skip meals. Or they avoid meeting up with friends because they cant afford it.
If they dont make needed home repairs, that increases the risk of accidents and falls, Flowers said. Regularly cutting pills is extremely dangerous. Avoiding social engagements can lead to isolation. Missing meals can lead to nutrient deficiencies.
In addition to bringing needed attention to this issue, the council is trying to enable financially overwhelmed seniors to better help themselves. It has created a resource page, www.ncoa.org/seniordebt , on its website to give seniors some guidance.
If you know a senior in debt, encourage him or her to use the councils BenefitsCheckUp tool, www.benefitscheckup.org, a free resource that helps people figure out if they qualify for programs that provide financial assistance for health care, prescriptions, food and other services. The database includes more than 2,000 public and private benefits programs from all 50 states and the District of Columbia.
Answer a few questions and seniors get a general list of available aid. But if they press ahead and provide additional information about, among other things, household income, expenses and assets, theyll get some information with state-specific programs and other benefits.
The council also has an EconomicCheckUp tool, www.economiccheckup.org, that provides budgeting assistance, calculators, tips to manage debt and other money-management resources.
If nothing else, use the councils report to start a conversation with a senior who may need help. This issue isnt about somebody elses relative. It could be your loved one. And it may touch you one day.
Michelle Singletary is a columnist for The Washington Post Writers Group. Readers can write to her c/o The Washington Post, 1150 15th St., NW, Washington, DC 20071. Her email address is This email address is being protected from spambots. You need JavaScript enabled to view it.. Follow her on Twitter @SingletaryM or Facebook www.facebook.com/MichelleSingletary. Comments and questions are welcome, but due to the volume of mail, personal responses may not be possible. Please also note comments or questions may be used in a future column, with the writers name, unless a specific request to do otherwise is indicated.