Credit Cards

Credit Cards

Choosing a Credit Card

Credit card issuers offer a wide variety of terms. Consider and
compare all the terms, including the following, before you select
a card:


o Annual Percentage Rate (APR) - the cost of credit as a yearly
rate.

o Free or Grace Period - allows you to avoid any finance charge by
paying your balance in full before the due date. If there is no
free period, you will pay a finance charge from the date of the
transaction, even if you pay your entire balance when you receive
your bill.

o Fees and Charges - most issuers charge an annual fee; some also
might charge a fee for a cash advance or if you fail to make a
payment on time or go over your credit limit.

Shop around for the terms that are best for you. Before giving
money to a company that promises to help you get a credit card:
o find out who the card issuer is and get the credit card terms in
writing, including all the fees and whether a deposit is required;

o try to apply to a card issuer directly, rather than giving money
to a third party; if you don't get the credit card, you might not
be able to get your money back;

o beware of "credit cards" that only allow you to buy from certain
overpriced, restricted goods catalogs; and

o beware of companies that promise "instant credit" or guarantee
you a credit card "even if you have bad credit or no credit
history;" no one can guarantee you credit in advance.

Using a Credit Card

Know your credit card protections. When you have used your card
for a purchase and you don't receive the goods or services as
promised, you might be able to withhold payment for the goods or
services. Card issuers must investigate billing disputes. (See
the section on Credit Billing and Disputes, page 20.)

If your card is lost or stolen, you are not liable for any
charges if you report the loss before the card is used. If the
card is used before you report it missing, the most you will owe is
$50.

Protect your credit record. Pay bills promptly to keep finance
charges low and to protect your credit rating. Keep track of your
charges and don't exceed your credit limit. Report any change of
address prior to moving so that you receive bills promptly.

Preventing Credit Card Fraud

o Sign cards when they arrive, so no one can forge your
signature on the cards and use them.

o Keep copies of all sales slips. Open credit card bills
promptly and compare the sales slips with the charges on your bill.


o Promptly report any suspicious or unauthorized charges to the
card issuer.

o Never give your credit card number over the phone unless you
have made the call and you know the company is reputable.

o Draw a line through blank spaces on charge slips. Do not sign
a blank charge slip.

o Destroy carbons and incorrect charge slips.

o Keep a record of your card numbers and expiration dates and the
phone number of the card issuer in a safe place.

To order free brochures on credit, contact the Federal Trade
Commission, Public Reference Section, 6th and Pennsylvania
Avenue, N.W., Suite 130, Washington, DC 20580, (202) 326-2222. To
file a complaint, contact your state or local consumer
protection agency, your state attorney general or your Better
Business Bureau.

Consumer Privacy

How to Reduce Unwanted Solicitations and Guard Your Privacy o Pay
for local purchases with cash, rather than by check or credit card.

o Ask manufacturers, catalogue or magazine subscription
companies, charities and others with whom you do business not to
sell your name to others for marketing purposes.

o Don't release your Social Security Number except to an
employer, government agency, lender or credit bureau that
requires it to identify you.

o Don't give anyone your credit card or checking account numbers
unless you're making purchases with them, and don't put credit card
numbers on your checks.

o When filling out warranty or other information cards, don't
include optional or unnecessary personal information.

o Federal law gives you the right to ask telemarketers to take
your name off of their lists and not to call you again. Keep
records of their names, addresses and the dates of your requests.
File a complaint with the Federal Communications Commission (see
page 109) if they don't remove your name from their marketing lists
once you have made your request.


o Personal information is easily obtained by companies promoting
sweepstakes, contests and prize offers. Be careful to check out
the companies before deciding to do business with them or
releasing personal or financial information. Contact your state or
local consumer agency (see page 70) or Better Business Bureau (see
page 63). These three types of promotions are in the top 10
consumer complaints nationwide.

Review Files that Contain Information about You

The Medical Information Bureau (MIB) is a data bank used by
insurance companies. You might want to obtain a copy of your file
and make sure the information it contains is correct. Write to the
Medical Information Bureau, P.O. Box 105, Essex Station, Boston, MA
02112.

Credit bureaus keep records about your credit history. You should
review periodically your credit reports for accuracy. (See the
section on "Credit Reporting," beginning on page 19.) To limit
mail or telephone calls you do not want, you can sign up at no cost
for a service that tells some of the telephone or mail marketing
companies not to contact you. (See the sections on Telemarketing
and Mail Order, pages 13 and 12, respectively, for more
information.)

Many states have their own privacy laws concerning telemarketing,
employment, the use of social security, credit card or checking
account numbers, medical records, mailing lists, credit reports,
debt collection, computerized communications, insurance records and
public data banks. Check with your state or local consumer agency
about specific privacy rights or a referral to the
appropriate agency.


Advance Fee Scams

Be wary of ads promising guaranteed jobs, guaranteed loans, credit
repair, debt consolidation or similar claims. Many of these are
only a way to get you to send money in exchange for little or no
service.

o Be cautious when responding to advertisements which use 900
telephone numbers. You can be charged substantial and differing
amounts for calls to 900 numbers.

o Be careful with your personal information, including Social
Security Numbers, credit card numbers and bank account numbers,
among others. Fraudulent businesses could use this information to
make an unauthorized charge to your credit card or to withdraw
money from your bank account.

o Before you make any payment, ask the business to send you a
contract and other information stating the terms of the service and
whether you can cancel the service and get a refund.

o Ask how long the firm has been in business and if it is
licensed properly. Request that the company send you copies of its
business or other licenses. Review all contracts carefully. o
Contact your state or local consumer protection agency and the
Better Business Bureau to find out a company's complaint record.
o Some states have enacted laws banning or regulating these types
of businesses. To find out the law in your state or to report a
fraud, contact your state or local consumer protection agency.

o For information on the dangers of these types of scams, call the
non-profit National Fraud Hotline at 1 (800) 876-7060 (toll free).