Even Mainstream Media Encourage Chicago Consumers to Get Tangled in Credit Cards
A recent Forbes.com article lays out how a person could go about getting a credit card even when he or she has no credit established.
The article seems to be aimed at college students or immigrants who have never obtained credit before. But what it fails to reveal is that credit card companies have traps -- hidden fees, late payment fees, high interest rates and other built-in policies that can ensnare inexperienced consumers.
This can lead to debt problems that can be difficult to repair. Damaged credit in Chicago is a difficult thing to fix because after years of minimum payments and high interest rates, the amount of debt just keeps piling up and credit scores keep plummeting.
Chicago bankruptcy lawyers have seen how credit card companies through the years have hammered their customers with fees and penalties that lead them deeper and deeper into debt. Obviously, credit plays a large part in the nation's economy. Without it, people wouldn't be able to buy houses and cars, or start businesses. But it can also be very dangerous.
For many college students, having no credit is a starting spot to getting credit. They are getting by on minimal income and need to be able to qualify for renting apartments and making purchases that are more expensive than the cash in their bank accounts.
Credit card companies have hired smart marketing people who try to appeal to college students. They offer "perks" and can sometimes get universities and colleges to team up with them so that spending money gives them credits at book stores or campus restaurants. They try hard to appeal to college students, who don't understand the problems that can linger if credit card habits get out of hand.
Forbes offers some tips to college students who are looking to get their first credit card:
-Make sure the credit card actually reports credit. There are prepaid cards that are attractive to students who don't want to get trapped with credit damage, but they may not report credit, which don't help your credit score. Other cards charge fees, but will help a person establish credit.
-Some cards offer perks such as a small percentage of cash back for paying a bill on time, an incentive that can lead to improved credit scores.
-Getting a co-signer will also help your credit, but it puts the co-signer, sometimes a relative, on the hook if your mess-up. Your poor credit can affect their credit.
Credit cards can be helpful for college students and young consumers who want to try to build their credit, but if not harnessed, they can lead to poor credit in a hurry. Even a person who has spent years of building up strong credit scores can have those toppled when late fees and hidden fees start getting reported by the credit card companies to the credit agencies.
They must be used cautiously and consumers must do their homework when deciding which card to choose. Find out about the different types of fees, how much they are, when they're assessed, and what happens to interest rates if a payment is made late.
If you need to speak to a Chicago bankruptcy attorney call the DebtStoppers Bankruptcy Law Firm at 800-440-7235 today for a free debt analysis. Call 800-440-7235.
More Blog Entries:
Fed Plan Could Lead Chicago Consumers Into More Debt: October 5, 2011
Tackling Your Chicago Debt Ceiling Without an Act of Congress: August 16, 2011
Additional Resources:
Perfect Ways To Obtain A Credit Card With No Credit, by Jason Collazo, Forbes.com