Getting Credit

When you apply for credit, a creditor may not:

• Ask about or consider your sex, race, national origin, or religion.
• Ask about your martial status or your spouse, unless you are applying for a joint account or relying on your spouse's income.
• Ask about your plans to have or raise children.
• Refuse to consider reliable public assistance income or regularly received alimony or child support.
• Discount or refuse to consider income because of your sex or marital status or because it is from part-time work or retirement benefits.
   

Choosing a Credit Card

It's also a good idea to look at the Credit Limit and how widely the credit card is accepted, as well as the plan's additional services and features.

Consider and compare all terms, including the following, before you select a credit card:

Grace Period

The Grace Period is the date by which or the period within which any credit extended for purchases may be repaid without incurring a Finance Charge. Knowing whether a credit card gives you a Grace Period for purchases and Cash Advances is especially important if you plan to pay your account in full each month. Without a Grace Period, the credit card issuer may impose Finance Charges from the date you use your credit card or from the date each transaction is posted to your account.

Annual Percentage Rate (APR) and Finance Charges

The APR (Annual Percentage Rate) is a measure of the cost of credit, expressed as a yearly rate. The credit card issuer must also disclose the "periodic rate," which is a rate applied to your outstanding balance to figure the Finance Charge for each Billing Cycle.

Some credit card plans allow the issuer to change your APR when interest rates or other economic indicators (called indexes) change. Because the rate change is linked to the indexes' performance, these plans are called "Variable Rate" programs. Rate changes raise or lower the Finance Charge on your account. If you're considering a Variable Rate credit card, the issuer must also provide information that discloses to you:

• That the rate may change.
• How the rate is determined, which index is used, and what additional amount (the "margin") is added to determine your new rate.

NOTE: Most credit card plans allow the issuer to "reprice" your current APR if the account falls into poor standing or becomes delinquent. Re-pricing is the act of increasing the APR.

Annual Fee

Some issuers charge annual membership or participation fees. They often range from $25 to $50, and sometimes reach as much as $100. "Gold" or "Platinum" cards sometimes reach as much as several hundred dollars. These fees may be charged whether or not you use the credit card.

Transaction Fees and Other Charges

A credit card may include other costs. Some issuers charge fees if you use the credit card to get a Cash Advance, make a late payment, or exceed your Credit Limit. Often an issuer will charge a fee to transfer a balance from another creditor's account to their account. Fees are disclosed to you in your Terms and Conditions as well as in your Account Agreement. It is important that you read these documents in order to understand your responsibilities as an account holder.

Balance Computation Method for the Finance Charge

If you don't have a Grace Period or if you expect to pay for purchases over time, it's important to know what balance computation method the issuer uses to calculate your Finance Charge. This can make a big difference in how much a Finance Charge you'll pay � even if the APR and your buying patterns remain relatively constant. Examples of balance computation methods include the following:

Average Daily Balance: This is the most common calculation method. The issuer totals the beginning balance for each day in the Billing Period and subtracts any credits made to your account that day. While new purchases may or may not be added to the balance, depending on your plan, Cash Advances are typically included. The resulting daily balances are added for the Billing Cycle. The total is then divided by the number of days in the Billing Period to get the "Average Daily Balance."

Adjusted Balance: This is usually the most advantageous method for credit card holders. Your balance is determined by subtracting payments and credits received during the current Billing Period from the outstanding balance at the beginning of the Billing Period. Purchases made during the Billing Period aren't included. This method gives you until the end of the Billing Cycle to pay a portion of your balance to avoid the Finance Charges on that amount. Some creditors exclude prior unpaid Finance Charges from the previous balances.

Two-cycle Balances: Issuers sometimes use various methods to calculate your balance that make use of your last two months' account activity. Read your agreement carefully to find out if your issuer uses this approach. This is the sum of the Average Daily Balances for two Billing Cycles.

The Truth in Lending Act requires a lender to inform you of the cost to borrow, so that you can compare the cost and terms of credit offered by various lenders.

	Card Category: All Business Charge Foreign Poor Credit Pre-Paid Regular Reward - Airline Reward - Auto Reward - Cash Reward - Finance Reward - Gas Reward - Hotel Reward - Retail Reward - Sports Reward - Travel Reward - Other All Reward Cards Secured Student Intro APR: All 0.0% 1.9% or Less 2.9% or Less 3.9% or Less 4.9% or Less 5.9% or Less 6.9% or Less 7.9% or Less 8.9% or Less 9.9% or Less Time Period: All 3 Months or More 4 Months or More 5 Months of More 6 Months or More 7 Months or More 8 Months or More 9 Months or More APR (Purch.): All Less Than 6% Less Than 7% Less Than 8% Less Than 9% Less Than 10% Less Than 11% Less Than 12% Less Than 13% Less Than 14% Less Than 15% Less Than 16% Less Than 17% Less Than 18% Less Than 19% Less Than 20% Less Than 21% Less Than 22% Less Than 23% Less Than 24% Less Than 25% Annual Fee: All $0 $10 or Less $20 or Less $30 or Less $40 or Less $50 or Less $60 or Less $70 or Less $80 or Less $90 or Less $100 or Less $110 or Less $120 or Less $130 or Less $140 or Less $150 or Less

Using Your Credit Card Responsibly

Protect Your Credit Record

• Pay bills promptly to avoid late fees and to protect your credit rating.
• Keep track of your charges and don't exceed your Credit Limit to avoid Over-limit Fees.
• Report any change of address prior to moving so you receive bills promptly.

Your Credit Card Rights

The Fair Credit Billing Act applies to credit cards and can be used for:

• Billing errors.
• Unauthorized use of your account.
• Goods or services charged to your account, but not received or not provided as promised.
• Charges for which you request an explanation or written proof of purchase.

If your credit card is lost or stolen, you will not be held liable for any changes.

Credit Billing and Disputes

• Write to the creditor or credit card issuer within 60 days after the first bill containing the disputed charge is mailed to you. However, if more than 60 days have passed since you were billed for the item, you still might be able to dispute the charge if you only recently found out about the problem.
• Send your letter to the address provided on the bill. Do not send the letter with your payment.
• Be specific. In your letter, give your name and account number, the date and amount of the charge disputed, and a complete explanation of why you are disputing the charge.
• Keep a record of receipt to document that your letter was received. It's a good idea to send it by certified mail with a return receipt requested.

If you follow these requirements of receipt, the creditor or credit credit card issuer must acknowledge your letter in writing within 30 days of receipt and conduct an investigation within 90 days. While the bill is being disputed and investigated, you do not need to pay the amount in dispute. The creditor or credit card issuer may not take action to collect the disputed amount, including reporting the amount as delinquent, and may not close or restrict your account. If there was an error or you do not owe the amount, the creditor or credit card issuer must credit your account and remove any Finance Charges or late fees relating to the amount not owed. For any amount still owed, you have the right to an explanation and copies of documents proving you owe the money. If the bill is correct, you must be told in writing what you owe and why. You will owe the amount disputed, plus any Finance Charges. You may ask for copies of relevant documents.

Understanding Your Credit History

Contact information for the three major credit reporting agencies is as follows:

Equifax
P.O. Box 740256
Atlanta, GA 30374
toll free: 1-800-685-1111
http://www.equifax.com/

Experian
P.O. Box 9532
Allen, TX 75013
toll free: 1-888-397-3742
http://www.experian.com/consumer/index.html

Trans Union
P.O. Box 6790
Fullerton, CA 92834
toll free: 1-800-888-4213
http://www.transunion.com/

Anyone who takes adverse action against you in response to a report supplied by a Credit Reporting Agency, such as denying your application for credit, insurance, or employment must give you the name, address, and telephone number of the Credit Reporting Agency that provided the report.

• You have a right to know what is in your credit report, including medical information and, usually, the sources of the information. Make sure your report is accurate.
• Get your report for free if a company takes adverse action against you based on the report and you request your report within 60 days of receiving the notice of the action.
• YOu are additionally entitled to request one free report a year as outlined in ammendments to the Fair Credit Reporting Act (FACT).

If you find inaccurate or incomplete information in your report:

• Contact both the Credit Reporting Agency and the company that provided the information to the Credit Reporting Agency.
• Tell the Credit Reporting Agency in writing what information you believe is inaccurate. The information provider must investigate and report the results to the Credit Reporting Agency. If the information is incorrect, it must notify all nationwide Credit Reporting Agencies to also correct your file. If the reinvestigation does not solve your dispute with the company, ask that your statement regarding the dispute be included in your file. A notice of your dispute must be included anytime the Credit Reporting Agency reports the item.

Credit Report Access

Only people with a legitimate business need can get a copy of your report. An employer or a prospective employer can only get your credit report if you give written consent. Creditors, employers, or insurers cannot get a report that includes medical information without your approval.

Duration of Negative Information

A Credit Reporting Agency can report negative information for seven years, and bankruptcy information for ten years. Information about a lawsuit or an unpaid judgment against you can be reported for seven years or until the statute of limitations runs out, whichever is longer.

When Your Debt Is out of Control

If you ever find yourself in a situation where you can't make a monthly payment, notify your credit card issuer and work out a modified payment plan that reduces your payments to a more manageable level. Be cautious about turning to a debt counseling company to solve your debt problems. Avoid paying such a firm in advance until you find out what the company can really do. Before you sign a contract, check out the organization with the U.S. Better Business Bureau or with your local consumer protection agency.

Counseling services provide assistance to individuals having difficulty budgeting their money and/or meeting necessary monthly expenses. Many organizations, including credit unions, cooperative extension services, family service centers, and religious organizations, offer free or low-cost credit counseling.

The National Foundation for Consumer Credit Is There to Help (NFCC)

NFCC has 1,400 members that provide money management techniques, debt payment plans, and educational programs to help consumers learn to budget and use credit wisely. Many of its members are locally managed nonprofit agencies operating under the name Consumer Credit Counseling Service (CCCS). To locate the nearest NFCC member, call toll-free, 24 hours a day 1-800-388-2227, or visit its website at http://www.nfcc.org/.

Myvesta.org is the nation's first nonprofit Internet-based debt counseling service. It assists families and individuals with debt, credit, money and financial problems through its website at http://www.myvesta.org/, as well as through one-on-one counseling at 1-800-680-DEBT.

New Credit Card Rules from the Federal Reserve

• New Credit Card Rules Effective Feb. 22, 2010
• New Credit Card Rules Effective Aug. 22, 2010

Credit Glossary

Affinity Card
A credit card endorsed by groups such as colleges, sports teams, professional organizations, or special interest groups that are offered to their alumni, fans or members. Typically, use of the credit card gives financial benefit to the endorsing organization.

Annual Fee
A yearly bank charge for use of a credit card that is billed directly on the customer's monthly statement.

Annual Percentage Rate (APR)
The interest rate reflecting the total yearly cost of the interest on a loan, expressed as a percentage rate. Under the federal Truth in Lending Act, it must be calculated in a standard way to allow consumers to make "apples-to-apples"comparisons of lending terms.

Authorization
An Authorization occurs when you present your credit card or account number to a merchant for payment. An authorization reserves the purchase amount against your available credit to ensure that the credit is available at the time the transaction posts to your account.

Average Daily Balance
This is a method by which many creditors calculate Finance Charges. Adding each day's balance and dividing that total by the number of days in a Billing Cycle determines an Average Daily Balance. The Average Daily Balance is typically multiplied by the Periodic Annual Percentage Rate in order to calculate the amount of Finance Charges assessed on an account.

Available Credit
Available Credit is the amount of credit you have available to use for Purchases, Balance Transfers and Cash Advances.

Automated Teller Machines (ATM's)
ATM's are self-service machines that dispense cash and process deposits.

Balance Transfer
A Balance Transfer is the process of transferring a balance from one credit account to another.

Bankrupt
The status of being legally declared unable to pay your debts as they become due. Federal bankruptcy laws have been enacted which allow a person or organization to liquidate their assets to pay a reduced amount to their creditors or which allow the rehabilitation of the debtor by requiring creditors to accept reduced payments from future earnings of the debtor. Declaring bankruptcy is generally considered a last resort.

Billing Cycle (Billing Period)
The Billing Cycle is the period between billings for products and services - Normally a month.

Carrying a Balance
Carrying a Balance means the balance revolves on an account from one month to another. When a cardholder carries a balance he/she does not pay the balance in full every month.

Cash Advance
A Cash Advance allows you to obtain cash from your credit card account. Please note there may be restrictions on the amount you may withdraw. Typically, a Cash Advance is obtained through a financial institution or an Automated Teller Machine (ATM).

Cash Advance Fee
A Cash Advance Fee is a charge by the bank for using a credit card to obtain cash. This fee can be stated in terms of a flat per-transaction fee or a percentage of the amount of the Cash Advance.

Cash Advance Limit
The Cash Advance Limit is the established limit by which credit card holders can withdraw cash from their accounts. This limit is typically established as a percentage of the Credit Line.

Credit Payment Insurance
Credit Payment Insurance is a credit protection service offered by some creditors to their customers. It assists customers in maintaining a good credit rating in times of financial difficulty.

Credit
A Credit on your statement reflects any monetary transaction other than a payment that decreases your Outstanding Balance.

Credit Limit (Credit Line)
The Credit Limit is the total amount of credit extended to the customer by the lender.

Credit Reporting Agency (Credit Bureau)
A Credit Reporting Agency compiles data on consumers' credit payment history. Trans Union, Equifax, and Experian are the three major Credit Reporting Agencies in the United States.

Credit Report
The Credit Report is a critical factor in credit scoring systems that lenders use to issue credit cards, mortgages, or other loans. A Credit Report contains information regarding a customer's payment history and comes from a Credit Reporting Agency.

Creditor (Card Issuer)
A Creditor is an entity to whom money is owed.

Current Balance
The Current Balance is the total amount of credit spent on Purchases, Balance Transfers, and Cash Advances. This balance may include Finance Charges and fees.

Daily Periodic Rate
The Daily Periodic Rate is used to calculate the amount of Finance Charges assessed on an account. It is typically calculated by dividing the Annual Percentage Rate by 365.

Delinquency
A Delinquency means that payment is overdue on an account.

Finance Charge
Finance Charge is a fee for using credit. It is comprised of interest charges and other fees.

Fixed Interest Rate
A rate of interest charged on an account. This rate is in effect for the life of the loan, provided the account remains in good standing. This rate will not fluctuate based on the Prime Lending Rate.

Grace Period
If the cardholder does not carry a balance, the Grace Period is the interest-free period of time a lender allows between the transaction date and the billing date. The standard Grace Period is usually between 20 to 30 days.

Introductory Interest Rate
A rate of interest charged on an account for a specific, limited period of time. This rate is typically lower than the Ongoing Rate and is used by the creditor as an incentive.

Late Fee
A Late Fee is a charge to your account if the minimum payment due does not reach the lender by the payment due date.

Minimum Payment Due
The Minimum Payment Due is the smallest amount you must pay each month to keep your account in good standing. Your minimum payment can vary from month to month based on your current balance and is typically based on a percentage of the Outstanding Balance. You can always pay more than your minimum payment.

Ongoing Interest Rate
A rate of interest charged on an account for a period of time. This rate can be either a Fixed or Variable Rate.

Over Limit
Over Limit refers to the amount of your balance that exceeds your Credit Limit. If this occurs, an Over Limit Fee will be assessed.

Over Limit Fee
An Over Limit Fee is a charge for exceeding the Credit Limit on the account.

Outstanding Balance
The total amount you owe the creditor.

Post Date
A Post Date is the date that the transaction was debited or credited to your account.

Pre-approved
A credit offer with a "Pre-approved" status means that a potential customer has passed the preliminary credit-information screening necessary to obtain credit with the creditor.

Personal Identification Number (PIN)
A Personal Identification Number (PIN) is a secret number that identifies you and allows you to perform transactions at ATM's.

Prime Lending Rate
Prime Lending Rate is a variable interest rate that is often used in calculating the Interest Rate on a credit account.

Re-pricing
Re-pricing is the act of changing a credit card holder's APR.

Secured Card
A Secured Card is a credit card that a cardholder "secures" with a deposit to ensure payment of the Outstanding Balance if the cardholder defaults on payment. Secured cards are general-purpose credit cards targeted to customers with imperfect or limited credit histories who do not qualify for a traditional unsecured credit card loan.

Smart Cards (Chip Cards)
There are various types of Smart Cards, sometimes called Chip Cards. Electronic chips allow these credit cards to function in different ways: as credit cards, debit cards, frequent buyer or rewards program cards, I.D. cards, or any combination. Many college I.D. cards are chip cards. These may or may not be credit cards.

Transaction date
The Transaction Date is the date a transaction was initiated.

Variable Interest Rate
A rate of interest charged on an account. This rate may change and is typically calculated by adding or subtracting an amount to a base standard interest rate, usually the Prime Lending Rate.

• Getting Credit
• How to Choose a Credit Card
• Using Your Credit Card Responsibly
• Understanding Your Credit History
• Credit Glossary
• Credit Card Offers