credit card debt

Monday’s need-to-know money news

October 27, 2014 By Liz Weston

Today’s top story: How high your credit score needs to be in order to refinance. Also in the news: Tips on getting out of debt from people who have paid off thousands, ways to save on monthly housing costs, and how to avoid the scariest credit card fees.

What credit score do I need to refinance?
Reaching the magic number.

How to Get Out of Debt: Lessons From People Who Paid Off $100,000
Learning from the masters.

4 Ways To Save On Monthly Housing Costs
Every little bit helps.

The 5 Scariest Credit Card Fees – And How to Avoid Them
Paying even an hour late could cost you big bucks.

8 Online Banks That Let You Skip the Fees, Enjoy the Interest
Thinking outside the branch.

Q&A: Forgiving credit card debt

September 29, 2014 By Liz Weston

Dear Liz: Recently you wrote about debt being forgiven after seven years, but in your book “Deal With Your Debt,” I’m sure you said after four years credit-card debt is usually not collectible. Could you clarify? When I tell debt collectors about this, they merely laugh.

Answer: That’s understandable, because there is no forgiveness for most debt. It’s legally owed until it’s paid, settled or wiped out in Bankruptcy Court.

Each state sets limits on how long a creditor has to sue a borrower over an unpaid debt. Those limits vary by state and the type of debt. In California, credit card debt has a four-year statute of limitations. Creditors may continue collection efforts after four years; they’re just not supposed to file lawsuits.

Seven years is how long most negative marks, such as unpaid debts, can remain on your credit reports. Technically, most unpaid debts are supposed to be removed seven years and 180 days after the account first went delinquent.

Q&A: Credit cards vs student debt. Which should be paid off first?

September 22, 2014 By Liz Weston

Dear Liz: I have $8,000 in savings. Should I use it to pay the accrued interest on federal student loans that go into repayment soon? Or should I pay credit card debts of $662 at 11.24%, $3,840 at 7.99% and $3,000 at 6.99%?

Answer: Pay off the credit card debt. The interest isn’t tax deductible, and balances you carry on credit cards just eat into your economic well-being.

Your student loans, by contrast, offer fixed rates, a wealth of consumer protections and tax-deductible interest. You needn’t be in any rush to pay them off, particularly if you’re not already saving adequately for retirement and for emergencies. Federal student loans offer the opportunity to reduce or suspend payment without damaging your credit scores should you face economic difficulty and the possibility of forgiveness. Those aren’t options offered by credit card issuers.

If your student loan payments exceed 10% of your income when you do go into repayment, you should investigate the federal government’s “Pay as You Earn” program, which offers more manageable payments for many people, especially those with large debts and small incomes.

Thursday’s need-to-know money news

August 7, 2014 By Liz Weston

Today’s top story: How to improve your credit score by strategically using your credit cards. Also in the news: Avoiding common debt traps, five store credit cards you should avoid, and what to do when your financial situation leads to depression.

7 Credit Card Strategies to Help Your Credit
How to use your cards to improve your credit score.

Pay, Spend, Pay: How This Debt Mistake Can Set You Back
Avoiding the debt trap.

Don’t get credit cards from these 5 stores
Not unless you’re comfortable with interest rates in the mid-twenties.

7 Steps to Defeat Money Depression
What to do when financial stress gets the best of you.

How To Compare Home Insurance Companies
How to make sure you get the right policy for your home.

Thursday’s need-to-know money news

June 12, 2014 By Liz Weston

Today’s top story: Meet the credit score you didn’t know you had. Also in the news: What to do when you’re debt free, how to break out of a financial slump, and what single people need to do to protect their money.

You Have a “Secret” Credit Score That Could Be Working Against You
That late payment on your rent ten years ago could come back to haunt you.

Life After Debt: 5 Ways to Make the Most of Healthy Finances
Debt free. Now what?

4 Ways to Overcome Financial Inertia
Stop treading water.

3 Things That Make Single People Financially Vulnerable — And How To Beat Them
Because being single wasn’t depressing enough.

Is Your Credit Card Debt Average? And What’s Average?
One of the few times when being below average is a good thing.

Thursday’s need-to-know money news

June 5, 2014 By Liz Weston

Today’s top story: What can be learned financially during a parent’s last days. Also in the news: How to reduce your credit card debt through balance transfers, what new college grads should know about money, and should you buy life insurance for your kids.