GOLDEN VALLEY, Minn. -- April is Financial Literacy Month and a good time to talk about credit card literacy.
You may have noticed your credit cards bills look a little different these days. Companies are now required to tell you certain information to help you make better credit decisions.
President & CEO of the Minnesota Credit Union Network Mark Cummins appeared on KARE 11 Sunrise to talk about the new rules and some ideas for using credit more wisely.
There are two important pieces of information a credit card company has to tell you:
- Your credit card company has to tell you 45 days in advance when they plan to increase your rate or other fees.
- Your credit card company has to tell you how long it will take to pay off your balance if you're only making minimum payments.
Another change, you must give permission to allow transactions that will take you over your credit limit.
- Consumers must give credit card companies permission to allow transactions that will take you over your credit limit. Otherwise, such changes would be declined.
- If you are under 21, you need to show that you're able to make payments or you'll need a cosigner to be able to open a credit card account.
There are also changes to billing and payments:
- Your credit card company must mail or deliver your credit card bill at least 21 days before your payment is due.
- If you make more than the minimum payment on your credit card bill, payments must be directed to the highest interest balances first.
Ideas for using credit cards wisely:
- Don't use your credit card to make everyday purchases. Using your credit card as a substitute for cash is a habit that can quickly lead to debt.
- Do let your creditor know in advance if you won't be able to make your monthly payment on time. Most creditors will assist you if you let them know before you miss your payment. Simply call your creditor, briefly explain the situation, and ask if your late fees can be waived.
- Do stay within 30% of your credit limit. A large part of your credit score considers the amount of debt you have. Keeping your balances low helps you maintain a good credit score.
- Do try to negotiate a lower interest rate, especially if your current rate is higher than offers you receive. Evaluate the interest rate on your credit card periodically to be sure you are getting the best deal possible.
There are numerous educational events being during financial literacy month. The Minnesota Jump$tart Coalition for Personal Financial Literacy has one called "Preparing our Children for their Financial Responsibilities." It's scheduled for Tuesday, April 13. It's free, but you do need to register.
For more information go to: http://www.mnjumpstart.org/.
(Copyright 2010 by KARE. All Rights Reserved.)