Usury Laws by State, Interest Rate Caps, The Bible & More

Usury LawUsury laws cap the interest rates that can be charged on a line of credit or loan. More than half of all U.S. states today have usury laws in place, and each dictates its own maximum legal limit. However, they have no effect on most credit cards, thanks to effective deregulation that began in the ‘70s.

For decades since, usury laws have remained in the economic spotlight, with constant debate centering on whether they should be changed or maintained. Many decry usurious practices for hurting consumers while others claim that the absence of usury laws open up access to credit for more people. The debate is one that surely will continue for years to come.

Bankruptcy Costs: Attorney & Filing Fees, Cheap Alternatives & More

Bankruptcy-CostsBankruptcy isn’t cheap. In fact, it’s expensive. Between filing costs, attorney’s fees and mandatory counseling, the tab associated with today’s average bankruptcy case is more than $1,500. Such high costs have in recent years made filing completely unaffordable for about 200,000 to as many as one million Americans, according to the National Bureau of Economic Research. But there are ways to minimize the cost of bankruptcy.

To help you strategize, we’ve broken down the various fees as well as credit damage and other penalties associated with bankruptcy in detail below. We’ve also consulted some of the foremost authorities on bankruptcy to give you the best advice about navigating the process.

Paying Debt in Collections: When to Do It, How to Pay & Expert Tips

Debt CollectionsUnfortunately for consumers, the debt collection industry is thriving.  Not only does it boast $13 billion in annual revenue, but the industry is expected to grow by 15% from 2012 to 2022 – far faster than the average occupation.  That shouldn’t really come as any surprise, though, considering how debt-obsessed we’ve proven to be in recent years.

After spending our way into a Great Recession, we’ve defaulted on more than $182 billion in past-due credit card debt and racked up roughly $123 billion in new plastic-borne balances since 2009.  We’ve also allowed outstanding student loan balances to surpass $1 trillion.

What is a Good Credit Score?

What-Is-A-Good-Credit-ScoreThe FICO credit score is what most banks and lenders use, and anything in the 660-720 range is considered a good credit score under the FICO model (the higher the better).

However, there are more than 1,000 different types of credit scores, and they often utilize different score ranges. So, what’s a good credit score under one model might not be considered good under another. For example, 700 would denote good credit if it’s from FICO but would be below the good credit score range of the Vantage scale. The chart below shows the breakdown for the two most popular credit scores.

Credit Counseling: What It Is, How It Works, Credit Impact & More

What is Credit CounselingCredit counseling is the process of educating consumers about personal financial management as well as the steps that one can take to either avoid accumulating unsustainable balances or escape them with minimal damage. The ultimate goal of credit counseling is to help consumers mitigate financial difficulties through careful budgeting, enrollment in debt assistance programs, and the long-term adoption of responsible monetary habits.

Not only are there different types of credit counseling companies and professionals (nonprofits usually are best), but there are also various types of counseling services – from budget analysis to court-mandated bankruptcy counseling.  A credit counselor will be able to analyze your finances and steer you toward the proper improvement plan.  It is your job to find a trustworthy counselor who knows what he/she is talking about, and we will give you the tools and information necessary to do so below.

Credit Monitoring: What It Is, What to Watch Out For & How to Use It

What is Credit MonitoringMost people use credit monitoring to get notified about fraud as quickly as possible and, ultimately, minimize its impact on their finances.  It entails signing up for a service that keeps tabs on one or more of your major credit reports and then notifies you whenever a new account gets opened under your name, someone makes an inquiry into your file, or other potentially suspicious activity crops up.  Many credit monitoring packages also provide you with access to at least one of your credit reports and credit scores.  As such, consumers often use credit monitoring simply to keep track of their credit building progress.

A variety of different companies offer credit monitoring services, including the three major credit bureaus (Experian, Equifax, and TransUnion) and most of the major banks.  It’s no surprise that there’s a large market for such a product either, as identity theft has topped the Federal Trade Commission’s annual list of the most common consumer complaints for more than a decade.  And while credit monitoring won’t, strictly speaking, prevent identity theft or related credit card/loan fraud, it does have the potential to alert you about unauthorized access to your personal information before you would otherwise notice a problem.

Bankruptcy: What It Is, When to File, FAQ & More

bankruptcyBankruptcy filings have increased more than 500% since the early ‘80s, and well over 1 million people now file each year.  Interestingly enough, the dramatic rise in the “popularity” of bankruptcy has coincided with our increased societal reliance on credit cards.

“Overall, the increase in credit card and possibly mortgage debt levels since 1980 provides the most convincing explanation for the increase in bankruptcy filings in the United States,” Michelle J. White, a professor of economics at the University of California, San Diego and a research associate at the National Bureau of Economic Research, wrote in an article for the Journal of Economic Perspectives.  “But adverse events and debt levels interact with each other in explaining the increase in bankruptcy filings because, as debt levels increase, any particular adverse event is more likely to trigger financial distress and bankruptcy.”

Divorce and Credit Card Debt: Who Owes What?

Divorce-and-Credit-Card-Debt-Who-Owes-WhatWant to complicate an already complicated situation?  Mix credit card debt with a failing relationship.  Unfortunately, figuring out what happens to credit card debt in a divorce is an all-too-common predicament for the contemporary consumer, as divorce rates continue to hover around 40% and the average household owes well over $6,000 to credit card companies.

Understanding how to approach credit-related debt once the divorce papers have been filed (or even during a separation) is therefore a must.  And since the particular dynamics and solutions that are in play are largely situation-specific, you should choose the link below that is most applicable to your own circumstances in order to garner the most pertinent advice.

Identity Theft: What It Is, How It Happens & the Best Protection

Identity-Theft-What-it-is-How-it-Happens-the-Best-ProtectionIdentity theft occurs when someone gains unauthorized access to your personally identifying information – such as your name, Social Security Number (SSN), or bank account information – and uses it to commit fraud or other crimes.

The crimes that an identity thief is able to commit with your personal information range from applying for a credit card under your name before subsequently racking up prodigious charges to poaching your tax refund.  In some cases, identity thieves are even able to assume an unsuspecting person’s identity entirely, obtaining identification bearing their name and often committing crimes “as that person.”

Credit Card Fees: Most Common Types, How to Avoid Them & More

Credit Card FeesCredit card fees can be expensive and annoying, there’s no doubt about it.  But many of them can be avoided if you’re careful and others may be worth paying if you get something worthwhile.  For example, many of the best rewards credit cards charge annual fees, but people who use them frequently are able to earn additional rewards that outweigh the extra cost.

Given the myriad different fees that credit cards are known to charge, the differing situations in which they apply, how quickly they can add up, and the corresponding implications for your account/credit standing, it’s definitely worth familiarizing yourself with the ins and outs of these pesky charges.  The following topics are explained in detail below.

Canceling Credit Cards: Should You Do It & How to Avoid Credit Score Damage

Canceling-Credit-Cards-Should-You-Do-It-How-to-Avoid-Credit-Score-DamageIt’s common for consumers who have old, unused credit cards or who no longer trust themselves to wield plastic responsibly to express interest in canceling their accounts.  You might assume doing so to be a no-brainer, but the truth is that in many cases keeping your account active may actually be preferable.

The primary reason why it’s often best to refrain from closing old credit cards, even if you longer use them, is the significance of credit utilization and Length of Credit History to your overall credit score.  We’ll discuss the specific credit scoring implications of closing a credit card account in a bit, but in a nutshell, doing so will make it appear as if you’ve started using more of your available credit and may also effectively shorten your credit track record – both of which can make you appear less trustworthy to financial institutions and other decision makers.

Can a Credit Card Company Sue You?

Can-a-Credit-Card-Company-Sue-YouYou may think that it’s just an empty threat, but credit card companies and the debt collection agencies that often assume old debt can and will sue you for amounts owed.  In fact, they aren’t legally allowed to threaten a lawsuit if they do not plan to go through with it.

The chances that you’ll be sued for an unpaid credit card balance and the odds of the plaintiff being successful in recouping amounts owed depend on a variety of factors, including how far past due you are, when you made your last payment, and whether you can work out an alternative arrangement with your creditor.  Financial institutions typically don’t sue customers who owe less than $1,000 or are making regular payments.  As such, you shouldn’t need to worry about a lawsuit unless you owe a substantial amount and are well behind on your payments.

How to Fix Credit Report Errors

How-to-Fix-Credit-Report-ErrorsThe importance of your Experian, Equifax, and TransUnion credit reports cannot be understated, as all credit scores are based on the information in these reports and your credit standing dictates the credit card and loan terms that you qualify for, where you are able to live, the car you drive, and even the jobs you can get. But while certain types of information should be included in your credit reports, errors are not among them.

Credit report errors are unfortunately an all too common fact of life, however. The Federal Trade Commission estimates that roughly 1 in 5 people (or about 42 million Americans) have an inaccurate credit report, and other studies indicate that the prevalence of credit report mistakes is even higher. For example, the non-profit group American Consumer Credit Counseling pegs the error rate at an astounding 90%.

Church Credit Cards: Picking a Card & Accepting Donations

Church-Credit-Cards-Picking-a-Card-Accepting-DonationsWe routinely receive questions from church administrators, asking what type of credit card they should get for church expenses and/or how to accept parish-member donations made with plastic.

Both are great questions, as you might not consider religious groups and other nonprofit organizations to be businesses, yet they can’t be qualified as consumers either.  In other words, it’s fair to wonder whether such groups should opt for a business credit card or a general-consumer credit card.  In addition, while credit card payment processing has become far more accessible in recent years, guidance is still required to pick a service that increases donation levels rather than costs.

Bad Credit Guide

bad credit guideThere are various quantitative and qualitative ways to determine if you have bad credit—the easiest and most definitive of which is if you have a FICO score of less than 620. According to a recent study by FICO, the leading credit score provider, at least 43.4 million people could be classified as having “bad” credit following this recession. Realizing that you are not alone in having bad credit (though it may feel like it) is the first step, but you must also acknowledge that there are no quick fixes to this situation. Credit can only be improved through consistent responsible activity, so be wary of offers that promise miracles.

A history of bad credit can make a consumer feel as if he or she is drowning. Like a swimmer who sinks beneath the ocean’s surface and makes strong, consistent strokes to bring his or her head above water, a consumer needs to consistently add positive information to a credit report in order to mitigate past negatives and improve his or her credit score.

Credit Card Debt Settlement: What is It, How Does It Work, and What to Watch Out For?

Credit-Card-Debt-Settlement-What-is-It-How-Does-It-Work-and-What-to-Watch-Out-ForCredit card debt settlement is an agreement between an indebted consumer and a creditor that entails the consumer submitting a lump-sum payment for the majority of what they owe in return for the company that owns the debt forgiving part of the outstanding balance as well as certain fees and finance charges.

Unfortunately, the need to settle debt arises far too often. Consumers consistently spend beyond their means and eventually see their balances spiral out of control when interest charges and fees become unsustainable.

Credit Card Delinquency: How It Works, Levels of Severity & More

Credit-Card-DelinquencyWhile credit card delinquency rates have declined from their Great Recession peak, there are still millions of Americans struggling to deal with past-due credit card bills. It’s therefore essential that you understand how delinquency works – especially since the issue isn’t as straightforward as it might seem at first.

A consumer is characterized as being delinquent when they have fallen behind on their payment obligations for a monthly bill. When it comes to credit cards, delinquency doesn’t mean that you’ve failed to pay off your full balance in a given month, but rather that you did not make the required minimum payment.

How long does negative information stay on your credit report?

How-long-does-negative-information-stay-on-your-credit-reportWe all know that credit report information reflecting late payments, delinquent or defaulted accounts, and other unfulfilled financial obligations can have a very detrimental effect on your overall credit standing as well as your wallet by extension. Fortunately, there are limits on the length of time such negative information can remain on your files with the major credit bureaus.

But what are these limits? And what can you do if you believe that negative information has overstayed its welcome on your credit reports?

Secured Card Guide


Secured credit cards are designed for people with bad, limited or no credit history and use a security deposit that doubles as a credit limit to protect issuers from what are considered to be risky customers. If you do not have an outstanding balance at the time you decide to close your secured credit card, the entire security deposit is returned to you. Because issuers incur little risk with secured cards, these products typically also have low fee structures and minimal requirements for approval. All you generally need to do to open a secured credit card is provide a valid Social Security Number (SSN) and, of course, place the refundable security deposit.

Using a secured credit card is ultimately a great way to cost-effectively build or rebuild a solid credit history since secured cards report to the major credit bureaus in the same manner as any other credit card. In fact, no distinction is made between secured and unsecured credit cards on a credit report. Finally, since you can add to your deposit over time and thereby increase your spending limit, a secured card can also provide all the spending power you might need.

Will a Lower Credit Limit Hurt Your Credit Score?

Will-a-Lower-Credit-Limit-Hurt-Your-Credit-ScoreA credit card company can lower your account’s spending limit at any time, and it won’t have to provide notification unless the change will bring your credit line below your existing balance, thereby triggering penalties.  But, for most consumers, the potential credit score implications of a credit limit decrease are far more troublesome than decreased spending power.

A lower credit limit can indeed affect your credit score, but the real question is how?

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Our content is intended for general educational purposes and should not be relied upon as the sole basis for managing your finances. Furthermore, the materials on this website do not constitute legal advice and should not be relied upon as such. If you have any legal questions, please consult an attorney. Please let us know if you have any questions or suggestions.