Page 331 - Keys to College Success

ing scams, do not respond to any email that asks
you to enter personal financial information. Your
real bank and credit card companies would never
ask you for it via email.
■ Identity theft. The downside of technology is that
identity theft makes a mess of hundreds of thou-
sands of people’s finances each year. Do your best to
prevent it by holding on to receipts, shredding docu-
ments when you are done with them, making sure
no one sees you enter a PIN, only using secure sites
when shopping with your credit card online (they
begin with an “https” instead of “http”), and avoid-
ing giving out your Social Security number unless
absolutely necessary. 19

The best way to avoid problems is to read the fine
print, pay attention to your balances, and pay your bills
To maintain an accurate perspective on where your money goes, on time. Using a debit card is a smart alternative to pay-
keep credit card receipts and include those purchases as you
track expenses. ing on credit, because purchases are deducted directly
from your checking account and appear on your bank
statement. Paying by debit assures that you will only
spend money you have available.

Manage credit card debt
Even if you limit your card use to needs, you can still get into trouble. Debt can esca-
late quickly and can even lead to personal bankruptcy—a major blot on your credit
that can last for years, and one to avoid at all costs. A few basics will help you stay in
control.

■ Choose your card wisely. Carefully sort through all of the offers you receive. Look
for cards with low interest rate cards, no annual fee, and a rewards program.
■ Ask questions before charging. Would you buy that item if you had to pay cash? Can
you pay the balance at the end of the billing cycle?
■ Pay bills regularly and on time, and try to make more than the minimim pay-
ment. Set up a reminder system by creating an email alert through your card
account, making a note in your datebook, or setting an alarm on your electronic
planner.
■ If you get into trouble, call the credit company and ask to set up a payment plan.
You may even be able to make partial payments or get a reduced interest rate. You
might also contact the following organizations for help: National Foundation for
Credit Counseling or American Financial Solutions.
■ Shred credit cards when you close an account or if you feel you have too many
cards. Remember, even though you’ve destroyed the card, the debt remains until
CREDIT SCORE
A measure of how likely you’ve paid it in full and sent a written statement to the company asking to close
you are to pay your
the account.
bills, calculated from
a credit report using a ■ Stay aware of your credit score. Your credit score is a prediction of your ability
standarized formula.
to pay back debt. If you’ve ever bought a car or signed up for a credit card, the
deal you got was related to your credit score. If you rent an apartment, sign
up for a cell phone plan, or apply for a job where you are required to handle
CREDITOR
money, someone will examine your credit score. Most credit scores (also called
A person or company to FICO scores) fall on a credit-scoring scale running from 300 to 850. Your num-
whom a debt is owed,
ber gives creditors an idea of how reliable you are. In general, a higher score is
usually money.
more favorable.

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