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    UNC Wilmington
    601 S. College Road,
    Wilmington, NC 28403-5951
  • Phone: (910) 962-3177

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Consumer Credit

Choosing to open a credit card account, or deciding which card to use from those that you have, can often be tricky. Before making a decision, it is important to understand credit and how to use it. You should understand exactly what you are borrowing and how it will affect you.

Credit Cards

You already know how to use your credit card for purchases. And you may think that’s all you need to know. Actually, you’ll find it interesting and helpful to understand some basics behind credit cards. By using your credit card wisely and always paying your bills on time, you’re building a good credit history. This can help lay the foundation for your future success.

Your credit card account is actually a type of contract; in this case, it’s a contract with your credit card issuer. In exchange for the right to use your credit card, you agree to repay the amount you charge or borrow with the card. In many cases, you may also be required to pay interest on the amount you charge, particularly if you revolve, or carry over a balance on your account from month to month.

Understanding Credit Cards

Credit card use has both positive and negative repercussions:

Pros

Cons

Reliability: When making certain types of payments (such as online payments), there is added safety built into using your credit card verses a debit card. Also, some situations, such as renting a car, may require the security of a credit card.

Debt: Misuse can lead to excessive personal debt and a poor credit history.

Safety: It is often safer to carry a credit card versus carrying large sums of cash.

Interest: Missing or providing late payments can cause interest rates to increase, thus increasing your balance.

Emergencies:Credit cards can provide additional funding when you are in situations that require more physical funds than you have available.

Fraud:Credit cards may be stolen and used fraudulently.

Credit History:Having a credit card account in good standing will help you build a positive credit history.

Too easy to use:Credit cards are often too easy to use when repayment options are not fiscally viable.

Monitor Your Credit History

Your credit history is a running record of your past and present financial transactions. It is important that you monitor your credit history regularly as potential lenders will use your credit history to evaluate your creditworthiness.

You can obtain a FREE copy of your credit report annually by visiting Annual Credit Report. By obtaining your credit report, you will be able to make sure the information reported on your credit history is accurate and up-to-date.

Credit Scoring


When You Are Having Credit Problems

Be careful not to get into trouble with credit. You can tell if you’re getting in over your head with credit if:

  • You’re regularly using your credit cards for daily expenses.
  • You’re using cash advances from credit cards to pay other creditors.
  • You’re paying the minimum amount or less due on your bills each month.
  • You’re always late with bill payments.
  • You don’t know how much you owe.

Credit Rights

For more details on your credit rights:

United States Federal Trade Commission (FTC)
202-326-2222
www.ftc.gov

Credit Counseling

If you find you have debts you can’t pay back within 12-24 months, not including your student loans or mortgage, then you may have a credit problem. If you think you have this kind of problem, get help from a non-profit consumer credit counseling service.

Consumer Credit Counseling
(for the location nearest you, call) 1-800-547-5005
http://www.debthelpnow.com


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