Educate Your Clients about Credit

Most of your clients are in trouble because they misused their credit cards. Did you know that a survey taken in 1998 showed than 1.3 million Americans filed for bankruptcy due to credit card abuse? Today 1 in 5 Americans at any given time has at least one credit card maxed out.

Credit cards today are one of the most prominent causes leading to debt. As an extension of your credit repair services, you should begin teaching your clients how to get the best use from their credit cards while at the same time staying away from the trouble credit cards cause.

Educate Your Clients about Credit Card Use

A good way to start is teaching clients about what NOT to do with the credit cards. I call these as the 10 Commandments of Credit Cards:

1.    Carry only ONE credit card with you. Leave all the rest at home in a safe place out of the reach of children.  Children often use credit cards to gain access to inappropriate materials that require age verification or the credit card can be used to make unapproved purchases.

2.    Use the card only when you are sure you can pay the bills in full and ON TIME. Debt often starts with credit card installment payments. Keep in mind that credit card providers charge compound interest on the amount you owe them; and that snowballs into a huge amount in no time.

3.    Never go for introductory interest rate credit card. This attractive offer only looks good in the beginning. A majority of these credit cards have extremely high interest rates post the initial “introductory” period.

4.    Don’t pay for credit card protection.  As per the Federal Trade Commission (http://www.ftc.gov/bcp/conline/pubs/alerts/lossalrt.htm) you are legally only liable for $50 when someone unauthorized uses your credit card. When you buy protection, you pay this amount many times over for no extra benefit.

5.    Do Not own more than 2-3 cards. This is will not only limit your ability to make purchases you cannot afford, but also helps ensure that you are able to keep track of the billing details for each card, such as billing errors, interest rates, discrepancies, etc.

6.    Do not delay payment. Pay at least 5 days before the due date. It is perfectly acceptable to write your check before the due date; the main objective should be for the payment to reach the credit card provider before the due date to prevent late fees (which also negatively impact your credit score).

7.    Do not be careless. Protect your credit cards from misuse. Never write down the credit card numbers, pin numbers or transaction passwords where others can find them. If you have to write the numbers down disguise the numbers as phone numbers or something as innocuous. When possible do not store the card and the pin number in the same place.

8.    Do not forget to have the provider’s number within reach. In case your credit card is stolen you need to inform the provider as soon as possible so they can block any further use and issue you another credit card. Have their number in your cell phone directory and email so you can contact the company.

9.    Do not use credit cards for impulsive buys. You see something that you cannot resist. Resist it. Never use your credit card for impulsive buys. This is how debt begins.

10.    Do not forget to check the interest rates regularly. Many credit card providers hike up the interest rates without notice. Unless you check for it and re-negotiate, you end up paying more than you should for no reason.

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