Credit Cards: the Rates, the Fees and the Balances

By: Joe Leck

Virtually, anyone who is anyone carries credit cards with them.

It is becoming more and more common that the majority of consumers who hold a credit card account, are also holding balances on those cards… and the balances are increasing!

This is a real problem since interest rates on credit cards are at a record high.

I like to think of myself as a smart credit card user.

I use my card to pay for my gas and only my gas.  Then, at the end of each statement period, I pay it off completely and on time.

Thus, avoiding any interest charges or late fees.  This method of putting my plastic to use worked well for me.

Unfortunately, when I relocated to attend the Rutgers Business School, I found myself between jobs.

My balance climbed from $0 to $1,700 in just two semesters.

During this time, I still made sure to pay more than the minimum required payment, had I only paid the bare minimum, my balance would have been much higher.

However, at the time, I was very grateful to have that line of credit to help me through my financial hardship.

Young people are among the large majority of credit card users. Imagine a back-to-school shopping spree… with money that isn’t yours.

You are handed $3,000 and told to buy new clothes, buy your textbooks, pay your tuition, and maybe even put the rest towards a car payment.

Sounds nice, right?

Well, when the money you are spending is not yours, but that of a bank, or a credit card company… it’s not as glamorous as it seems.


Everyday, college students are putting purchases on their credit cards.

It is also becoming more and more common that students are paying for their college tuition via plastic as well.

College students have a very unique way of putting their credit cards to use, and the banks prey on that; sending out pre-approval packages in the mail.  Beware.

To new plastic users, it would be easy to think of credit cards as extra cash, but it is not, for it is actually the complete opposite!

When you charge something, you are spending money THAT YOU DO NOT HAVE!

By spending this money that you do not have at the time, you are living beyond your means… and on top of that, you end up paying more than the actual purchase if you do not pay off the entire balance on the credit card because every penny that is carried over onto next month’s statement, you are charged interest on.

Eventually, that interest builds up and that is where people get in trouble with debt.

While attending the Road to Wealth Seminar  last fall, keynote speaker Suze Orman famously known as the World’s Financial Advisor, lovingly warned the audience, “Live below your means, but within your needs.”


Banks, who are more often than not, the same companies who issue credit cards to consumers have been known for unfair, and sometimes unethical, practices (some more so than others).

Credit Union Credit cards are a rising popular alternative to opening a traditional credit card through a bank.

www.CreditCardConnection.org is a fabulous resource to use when shopping around for a credit card.

The website features a convenient Dean’s and Detention List to inform you of which credit card companies have been playing good and which ones have been cheating.

If you have any questions you can contact Ondine Irving, the founder of Credit Card Connection, via Twitter or Facebook.  I’ve been friends with her for quite some time and she is always offering valuable advise.

Let’s talk FICO briefly.  FICO stands for the Fair Isaac Corporation and it is the most important number in your life right next to your social security number.

FICO is your credit score.  It is effected by things such as late payments on a loan or credit card, charges over the amount of an available credit limit, and your debt to credit ratio (which is the amount of debt you have versus the amount of credit you have).

Your FICO will determine whether or not you will be approved for a loan, home mortgage, apartment lease, and sometimes even a job, which is becoming more and more popular.  A GOOD FICO score today is within the range of 720-850.

THIS IS WHERE YOU WANT TO BE!

So, cruise on over to www.myfico.com and know your score!

Credit is an important thing in the current economy.

A good credit score will give you a sense of financial freedom.

I want to share some quick tips about how to acquire (for people with limited or no credit history) and maintain a healthy FICO.

  • You should have at least ONE credit card!  Use it every now and then, and pay it off completely right away!
  • Know your interest rate.
  • Know your FICO score and get it as high as you can!
  • Surprisingly, if you have too many credit cards, it can put a damper on your FICO score, so try to only have about 3 or 4 credit card accounts.
  • Do not use credit cards as cash that you do not have.
  • Pay off your statement every month to avoid late fees and interest charges
  • Boycott the banks and their high interest rates and unfairness to card holders and get yourself a CREDIT UNION CREDIT CARD by going over to www.CreditCardConnection.org
  • Keep yourself educated on credit laws and resources on managing debt
  • Everyone has a bad week, if you are late on a payment and it’s your first time, call your credit card company and explain to them it was your first last payment and ask to have to late fee removed; and guess what, if it happens again, do the same thing because their records show that you haven’t made a late payment before since they removed it!

Make good use of your plastic, beware of interest charges, and spend wisely my friends.


Joe Leck holds an Associate in Science for Business Administration and is currently working towards his B.S. in Marketing at the Rutgers Business School. Before relocating to attend Rutgers, he lived in the Jersey Shore where he worked as an EMT and Realtor. He loves coffee, iProducts, and the beach. Come tweet with him (@joeleck).

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