Credit Cards: Signs of Trouble

Hopefully none of you are in credit card trouble, but here are a few signs to look out for:

Feelings of anxiety, sleeplessness, or worrying about bills.
Late, incomplete, or missing payments.
Using credit to pay basic expenses (such as rent) because your expenses exceed your income.
Taking cash advances for basic expenses.
Using one credit line to pay for another credit payment.
Getting reminder notices or phone calls from creditors.

If In Trouble, Take the Following Steps

Stop using credit to add to existing debt.
Cut back on spending.
Make a plan to meet credit bills. For help making a plan, call one of the reliable non-profit credit counseling agencies. (See Resources Handout)
If your situation is difficult but still manageable, you may want to personally call your creditors if you know you won't be able to make all payments by the due dates. Some creditors may be willing to arrange a repayment plan that you can manage. If you are working with a credit counseling agency, talk with the agency first.

Credit Counseling

If you are having trouble with your personal debt levels, considering seeking help. Keep the following items in mind when seeking assistance.

Your college may provide credit counseling.
Obtain assistance from a reliable non-profit credit counseling agency, such as Debt Counselors of America (DCA) or Consumer Credit Counseling Services. Many of their services are free, although they may charge a small fee for certain assistance options. A reputable non-profit counseling agency should be very open about their services, fees, and related costs.
Beware of companies or services that promise they can fix credit reports quickly. They can be fraudulent and expensive. Getting out of debt will take time, patience, and sacrifice.
Be cautious of debt consolidation plans. (A debt consolidation plan allows you to make just one payment to the consolidator, instead of numerous smaller payments to your many creditors.) These plans are not always the best option for your overall financial health. The consolidators may promise to lower your monthly payments; however, this action will extend the length of time it will take to pay off all your debts and ultimately you may pay more in finance charges. Make sure that you are with a reputable credit counseling agency before you enter into any debt consolidation plans.
The use of debt counseling may appear on your credit report. Some creditors consider this activity negatively; some may consider it as a positive step.

Source: Federal Deposit Insurance Corporation at www.FDIC.gov