The Top 5 Credit Card Myths…and what they can cost you

Credit Card Facts & Fiction

• Most profitable segment of lending industry

• Deregulated since 1978• Creditors set all terms and

conditions• Greatest growth since 1991

Credit Card Reality

$ Credit cards are a loan$ Credit is a privilege, not a right$ If you can’t afford to pay for something, you

can’t afford to charge it either!$ Only you have your best financial interests

in mind!

I MUST HAVE GOOD CREDIT BECAUSE THEY KEEP OFFERING ME MORE CREDIT CARDS

Credit Myth #5:

Credit Remedy

• What are you “pre-approved” for?

• How pre-approvals affect your credit score

• 1-888-5-OPT-OUT• Learn privacy policy for

all your creditors

THEY WON’T REPORT ME TO THE CREDIT BUREAU IF I’M A DAY LATE PAYING MY BILL

Credit Myth #4:

Credit Remedy

• Know the due date and due time for all your accounts

• Plan your spending so that money is available when you need it

MY ACCOUNT WILL STAY CURRENT AS LONG AS I PAY SOMETHING EACH MONTH

Credit Myth #3:

Credit Reality #3

• Understand the business of credit

• Minimum payments• Hardship programs• Seek assistance from

a reputable credit counseling agency

NEVER CLOSE AN OPEN CREDIT CARD ACCOUNT BECAUSE THAT WILL LOWER YOUR CREDIT SCORE

Credit Myth #2:

Credit Reality #2

• If you’re not carrying a lot of debt, you don’t need a lot of open credit to maximize your score

• Never close an account unless it has a zero balance

• Close accounts in order of new to old• Your credit score is not set in stone!

THERE’S NOTHING THEY CAN DO TO ME IF I DON’T PAY MY CREDIT CARD BILL

Credit Myth #1:

Credit Reality #1• Legal remedies for nonpayment

include summary judgments and garnishments

• File disputes according to the guidelines of the Fair Credit Billing Act

• Respond promptly to any legal summons you receive

• Consumer Statements

Consumer Credit Laws & Protections• Fair Credit Reporting Act: the right to see your

credit report; to dispute info in your report; to have incorrect entries removed

• Truth in Lending Act: requires lenders to tell you in writing the cost of credit before you accept a credit offer

• Equal Credit Opportunity Act: prohibits discrimination in lending practices

• FACTA: allows one free credit report each year from each credit bureau

Resources for Consumers

US Federal Trade Commission:• www.ftc.gov• www.consumer.govFlorida Consumer Protection:• www.myflorida.comMiami-Dade County Consumer Services:• www.miamidade.gov/csd