Maintaining great credit is a key to financial freedom. Many of us become entrenched in credit card debt because we do not stay ahead of the curve by maintaining responsible habits.
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Here are some habit to form now that will lead to a successful future.
# 1 Carry cash or use debit card for small purchases
The Dodd-Frank Wall Street Reform and Consumer Protection Act allows retailers and other merchants to set a minimum purchase amount for credit card transactions. “The minimum purchase amount must not exceed $10 and does not apply to transactions made with a debit card,” Visa explains on its website. In the past, some merchants imposed credit card minimums on customers, but did so in violation of card network rules. Vendors can now set a $10 credit card minimum without fear of penalty. Avoid this potential restriction by always carrying at least $10 or a debit card in your wallet. Under 21? Know the new rules for getting a credit card
# 2 Under the Credit Card Accountability, Responsibility and Disclosure Act of 2009, or Credit CARD Act
If you’re under 21 years of age, you must have either sufficient income or assets, or a co-signer to get a credit card. Issuers aren’t required to offer a co-signer option, however. Bankrate.com surveyed some of the major card issuers recently and found that some don’t permit co-signing. Before submitting an application, check with the card issuer to find out what the policy and procedure is regarding applicants under the age of 21.
#3 Save the credit card agreement summary
In addition to the credit card agreement itself, new cardholders must receive a one-page agreement summary, as required by Federal Reserve regulations that took effect July 2010. This summary should highlight the key terms of your contract. File it away for future reference. Watch for changes to existing accounts
#4 Keep Aware
Under the CARD Act, issuers must provide notice of certain changes to accounts 45 days before they take effect. For instance, issuers must give 45 days’ advance notice before increasing the required minimum payment. The law doesn’t require advance notice of all changes, however. Changes that don’t have to be announced ahead of time include credit limit reductions and account closures. Certain changes you can opt out of, such as increases to fees that were disclosed in the account-opening table. To allow for response time to an undesired change, open mail from card issuers immediately.