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Sure they have great catchy, sing-a-long commercials, but are all of those “free” credit report services we see ads for on TV every day for real? Well, yes and no. According to Young Money Magazine, these credit reporting sites,

“require you to sign up for a monitoring service, using your credit card in order to obtain the ‘free’ report. You will be required to cancel the monitoring service within 30 days or your credit card will be charged as much as $99 for an annual membership fee. These companies count on people forgetting to cancel the trial membership and not asking for a refund.”

So, while they do provide you with one free report, if you don’t back out in time, you’ll still end up paying a pretty hefty price tag. And regardless, such a service really isn’t worth it. Because, what a lot of recent grads don’t know (or don’t remember), is that under U.S. law, every citizen is entitled to one free copy of their credit report from each of the three national credit bureaus each year.

To order your free report, visit www.annualcreditreport.com (note: this is not a scam or service site like the others, it was created by the three nationwide consumer credit reporting companies), call toll-free at 877-322-8228 or complete the Annual Credit Report Request Form on the Federal Trade Commission website.

(image by creditreportsbyweb.com)
“Ask YOUNG MONEY: Can I trust free credit report offers?” [Young Money]

Technorati Tags: credit, credit report, debt, college, graduation

Popularity: 31% [?]

I have written before about the potential (if treated correctly) benefits of transferring your credit card debt to a card with 0% APR to help you get out of debt faster. Well, today the Mint.com blog took that topic and ran with it. If you have a decent sum of debt built up on your credit card but still aren’t convinced that a transfer balance is right for you, their post is definitely worth the read. Some stand-out points include their list of what to watch out for:

Hidden Fees: Most charge a transfer fee, usually 3% of the transfer amount. Aim for one that caps the amount at $50 to $75, or else a large balance transfer could cost a few hundred dollars. Avoid cards that charge a membership or annual fee.

Transfer rates versus purchase rates: Some offer 0% APR on balance transfers but not new purchases. Right now, a number of banks are offering 0% APR on new purchases as well, so make sure you’re getting the best deal possible.

Tricky payments: Payments are often applied to the transferred balance first because it has lower rates. The balance transfer must be paid before payments are applied to new purchases. For example, if you transfer $5,000 and then charge $50, all payments will go towards the $5,000 until it’s paid. Meanwhile, the $50 accumulates interest because most balance transfer cards don’t offer grace periods for new purchases.

And their list of ways to come out ahead during the balance transfer process:

Shop around: Compare the fees, APRs and payment policies of several cards. And be realistic about how quickly you’ll be paying down your debt. If you won’t have the balance paid before intro rates expire, find a card with the best overall rates and fees.

Pay more than minimum: Pay the principal balance before intro rates expire so you won’t have to pay interest. If you can’t pay down the full balance, at least pay more than the minimum. Once the standard rates kicks in, just making minimum payments extends the debt’s life for years.

Maintain low rates: Always make (at least) the minimum payment and pay on time. If you miss payments, you’ll end up with unreasonably high rates and late fees. Set up automatic bill pay if you’re forgetful.

Maintain clean credit: Some credit card companies routinely check your credit reports and raise interest rates if your profile changes for the worse. Make sure you keep a clean credit history.

Think long term: Don’t think that serial balance transfers are a way to avoid paying off your debt. Sooner or later you’ll have to pay it off. Consider them a potentially smart, near-term way to reduce the cost of carrying the debt you have and help you get back into the black sooner.

“Credit Card Balance Transfers: Pros, Cons and Caveats” [Mint.com]

Technorati Tags: balance transfer, credit cards, debt, Mint.com, college, graduation

Popularity: 31% [?]

The job application process is often referred to — just as the college admission process was — as a crap shoot. So many things to into play - from the quality and design of your resume, and the quality of your interview, to how many other people are applying to the same job; and of course, it always comes down to who you know. But did you know that your credit score can play a very important roll in you landing your dream job?

Employers want reliable, responsible employees. Potential employers (as well as life & automobile insurance companies, and landlords; just a head’s up) are granted access to your credit history, which they use to determine whether or not you are a good risk. Any employer’s line of thinking is, understandably (although sometimes unfairly, especially at our age), if you’re a poor credit risk - you’re probably a poor employment risk. If two people are vying for the same position, a hiring manager will likely opt for the candidate with a better credit score, as they are seen as more responsible. Just another reason to build your credit, not begin to wreck it, while still in college!

(image by jadedhalo)

Technorati Tags: getting a job, credit report, credit, college, graduation

Popularity: 31% [?]

photo credit: s,B - Michael Brenton-King of The Wachoo Wachoo

I’m sure you’ve read everywhere, as I have, that having a credit card – or worst yet, adding a second card *gasp* – will cripple any steps towards financial freedom. However, that being said (and believe me, I do agree), one case exists where credit cards might actually help you on your road to recovery. What am I talking about? Credit cards which offer 0% APR on initial balance transfers.

With the state of the economy such as it is these days, credit card companies are itching for new business and they’ll get it any way they can – one such way is by offering new customers 0% interest on any balances they transfer from an old card for a certain initial period (many in the 12-15 month range!). Some companies will even deposit cash right into your checking account to pay off previous balances (see using 0% APR to pay off all of your high interest debt)!

Why is this helpful?

If you’re the typical recent grad – as I know many of you are – you’ve undoubtedly wracked up a bit of debt in the months since graduation (or you can expect to, if you haven’t gotten your diploma yet); moving, new furniture, car & student loan payments, a new business wardrobe – these things aren’t cheap. Well, look at it this way, if you put any of those items on a credit card where the APR is even 10% (and most interest rates aren’t even that low; I think the national average right now is hovering around 14%), you’re paying an additional $10 for every $100 in debt each month! With those kinds of numbers, paying off any decent amount of debt can be very tough (next to impossible, really, on an entry-level salary). But, eliminate that interest for a full year (or more) and suddenly tackling your debt seems much more obtainable.

Buyer Beware:

While signing up for a credit card with 0% APR on balance transfers is certainly taking a worthwhile step in the right direction, there are a few things you need to look out for. First, transfer fees – even though the interest rate is zero, make sure you read the fine print. Credit card companies often charge a percentage of the amount transferred as a fee for the transaction. You want to make sure there is either no fee at all or that any fees in place have a cap to them (say $5-$75) and not just a percentage of the amount transferred, so you’re not overpaying. If the card you first choose has a transfer fee attached to it, don’t be afraid to keep looking – there are plenty of offers out there which waive the transaction fee all together; or for the first transfer at least.

Also, remember that having more than two credit cards open at once will damage your credit score, making long-term financial goals – like a new car, house, or wedding – much harder to obtain. So, if the new card is your third (or even your second), you want to be sure and close any old cards as soon as the transfer of your balance is complete.

Technorati Tags: credit cards, debt, debt reduction, college

Popularity: 26% [?]