This website and our business is dedicated to consumer credit education.  Providing people with the information they need to understand their credit reports and get better credit scores is what we do. 

A significant part of that is using existing credit cards and retail accounts as credit building tools.  However, as the financial industry’s challenges continue, consumers are being hit rather hard by abrupt closings of long-time accounts in good standing, extreme interest rate changes, and reduced credit limits as they pay down their debt to help their own financial situation.

ANNUAL FEE
Now there is something else to watch for – Annual Fees.  Some cards without an annual fee are now adding one on.  Some cards that already had the annual fee are increasing the amount.  Read your statements every month, including that tiny, fine print where they might put the Notice of Changes to Your Account Terms.  If you are suddenly hit with extra charges on your credit card, contact the customer service department and ask for an exemption or waiver.  They may still value your business enough to do it.  And if they agree to reverse the fee, get it in writing.

REWARDS PROGRAMS
If any of your credit cards have rewards programs, it might be a good idea to cash them in.  As financial institutions look for ways to save money and cut back on expenses, they may makes changes to, or discontinue, these perks, particularly with the new law, The Credit Card Accountability, Responsibility and Disclosure Act of 2009, taking effect next year.

KEEP THEM OPEN
For credit cards to be effective as credit building tools, they must be open and reported on your credit file.  Check your own reports regularly to be sure all three credit bureaus have your complete account information.  If not, contact the credit card company to request they report to all three bureaus. 

Use your credit cards, retail store accounts, and gasoline cards once every four months for a small purchase of something you were going to buy anyway.  This could be a pair of socks, a tank of gas, or school supplies.  Then pay off the bill in full as soon as it arrives, lock up the credit card in your desk, and mark your calendar or planner to use it again in another four months.  This will keep your account open, active, and included in your credit score, while saving you money by NOT carrying a balance on the account and paying interest.

In these trying times, it is extremely important that consumers do everything they can to protect themselves and their financial future.  Learn about your credit, subscribe to our RSS feed for instant updates on new articles, become credit-wise.  For your Personal Credit Building Plan with effective strategies and information on building your credit, contact us today.