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If my card offers a grace period, does that mean my purchases are interest-free, even when I carry a balance from month-to-month? |
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No. If you carry a balance, the issuer will charge interest from the date of posting or purchase (depending on issuer policy) on all new purchases. Generally, your purchases are interest-free only when you meet all of the following criteria:
- Your card offers a grace period.
- You start the billing cycle with a zero balance.
- You pay all new purchases in full by the due date.
(Note: Most cards do not offer a grace period on cash advances.) |
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Since most credit card issuers use some form of the average daily balance method for calculating interest, will I save more money (when carrying a balance from month to month) if I send in my payment early, rather than waiting until the due date? |
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Yes. Because the interest "clock" is ticking daily, the sooner the lender posts your payment, the less interest you have to pay. |
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How can I prevent someone using my personal information to apply for credit in my name? |
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When someone wrongfully obtains and uses another person's personal data in some way that involves fraud or deception, typically for economic gain, it's called identity theft.
Steps you can take to reduce the risk of your identity being stolen include:
- Check your credit report at least once a year. Investigate if you find accounts that aren't yours.
- Rip up, or better yet, shred, any credit card applications, bank or billing statements, and any other sensitive documents.
- If you don't get a bill for one of your credit cards in any given month, call the issuer immediately. Don't just assume you're off the hook that month.
- Use a lockable mailbox if possible for incoming and outgoing mail (especially bills).
Learn More About Identity Theft
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If I accept a pre-approved credit card offer, am I guaranteed to receive the card? |
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No. Card issuers are allowed to conduct a second screening when you accept a pre-approved offer. If you do not meet the criteria, you may be offered a card with different terms, or you may be turned down. |
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If a lender turns me down for credit, am I entitled to know why my application was denied? |
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Upon denying credit, lenders are required to provide you with the following:
- Information about how to order a free copy of your credit report, if one was used in the evaluation of your application.
- The specific reasons you were turned down, or instructions on how to obtain those reasons.
- A written notice that your application has been turned down.
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Can a creditor turn my account over to a collection agency if I am paying something, even $1, on the account? |
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Yes. A creditor can turn your account over to a collection agency if you do not meet the terms of the account. That means if you are late with a payment, or make a partial payment, the creditor has the ability to turn your account over to a collection agency. |
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Will declaring bankruptcy help my credit history since I will no longer owe any debts? |
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No. Bankruptcy is one of the most serious marks on a credit report, and it can stay there for up to ten years, making it more difficult and expensive to get credit. In addition, bankruptcy does not always wipe out all debts, so you may still owe some debts, depending on your situation. See Credit History. |
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If I seek help from a non-profit counseling agency, will my credit rating be ruined? |
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Not necessarily. If you enter a debt repayment program with a counseling agency, most creditors will bring your account up-to-date, as long as you stick with the program. A very few creditors may report your account as late or being repaid through counseling. Those remarks, however, are not considered as serious as bankruptcy, legal judgments or tax liens. |
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What tactics can a collection agency take to force me to pay what I owe? |
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Under the Fair Debt Collection Practices Act, collection agencies can inform you that you will be sued for non-payment of your debt. While collection agencies may be persistent in their efforts, they are required to follow federal and sometimes state laws that prevent harassment and deceptive practices.
Debt collectors are NOT permitted to:
- Call you repeatedly for the purpose of harassing you.
- Call before 8 A.M. or after 9 P.M.
- Call you at work if your employer prohibits it.
- Use abusive or obscene language.
- Publish your name in a list of "deadbeats."
- Contact others, such as employers or neighbors, to pressure you into paying.
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