American Express Blue Cash Rewards – Cash Back Plus Free Credit Report

Blue cash from American Express is our pick for best cash back credit card.  The reason we use the amex blue cash card for the majority of our purchases is the cash back it offers at gas stations, supermarkets, and department stores. 

Cash Back

The Blue Cash card starts earning higher cash back on everyday purchases from the first dollar you spend.  Unlike previous versions of the card, you don’t have to hit spending tiers to earn the maximum cash rebate.  The highest earning category is supermarkets, followed by gas stations and department stores.  The percentage you get back depends on whether you have the Blue Cash Everyday card or the Blue Cash Preferred.  The Everyday card earns lower cash rebates but has no annual fee. The Blue Cash Preferred card charges an annual fee but pays higher cash back percentages, the right one for you really depends on how much you use the card for groceries and gas.

Free Credit Report

I recently discovered a new feature of the blue cash card, American Express offers an annual free credit report and credit score to card members.  Once you login to the American Express website you can request your Experian credit report and credit score free of charge once a year.

I think they might offer this benefit to all Am Ex card holders but I didn’t even know it existed until I recently received their “Inside Blue Cash” email newsletter that covers the various features and benefits of the card.

Tracking Cash Back Rewards

Something else I wasn’t aware of was the “Blue Cash Tracker” that you can access once you’re logged into the American Express website.  It’s a pretty useful summary of how much cash back you’ve earned year to date and in past years.  We’ve been paid at least $400 a year in cash back rewards, most years it’s been over $500.

There are some interesting graphs that compare your spending and cash rewards to all other blue cash card holders and there’s a “Blue Cash” calculator that lets you estimate how much cash back you’ll earn based on your gas station, supermarket, and drug store purchases.

While a lot of the major supermarkets and gas station chains accept American Express, not every place does so I carry a backup Chase credit card for those occasions.

Win an American Express Gift Card

The last thing I learned in the blue cash newsletter is that you can win a $50 am ex gift card by sharing an interesting story of something you purchased with your American Express blue cash card.  Here’s how the email described it:

“What’s your favorite watercooler story about the Card? The time you used your cash back on a family beach trip? E-mail us what you love about your Card, and get a $50 American Express® Gift Card if it’s published.”

Maybe I’ll submit my “Why I Love My American Express Blue Card” post I wrote last year, although it’s more practical and not really fun or funny. 

Anyhow, that’s a quick review of some of the benefits and features of the card. The Amex Blue Cash is the best cash back credit card for our spending patterns and it has some pretty useful features to help track rewards and even monitor our credit.

Best Credit Cards for College Students – Charge Wisely & Build Your Credit History

A review of the best credit cards for college students can have two very different outcomes depending on whether the student is responsible enough with money to pay off the bill when they sign up for a credit card.

Who Should Have a Student Card?
For students that will carry a balance, the best credit card is no card at all; too many students leave college with enormous debt due to an inability to pay off the things they charge on their cards.

On the other hand, if you’re good enough with money to only buy the necessary items and pay off your balance each month then a student credit card can be a good way to build your credit history.

Reasons Not to Open a Credit Card
Let’s start off by looking at the reasons why you shouldn’t apply for a student credit card. 

You shouldn’t open a line of credit if you’re doing so on a whim.  You’ve all probably seen booths on campus where you can get free food, T-shirts, or other items in exchange for filling out a credit card application.  Trust the thousands of students deep in debt across the country who would tell you emphatically that the free stuff isn’t worth the card.

Avoid a credit card if you don’t have a plan for how to use it or an income to pay it off.  This goes along with not opening a credit card on a whim; you should know what expenses you’ll put on the card and where the money will come from to pay off the balance each month.

If you’re an impulse shopper, don’t get a credit card. The temptation to buy something in the heat of the moment and figure out later how to pay for it will be too great.  Save yourself hassle and a lot of interest payments and don’t sign up for a student card.

Lastly, here’s a list of common credit card mistakes that college students should avoid.

Benefits of a Credit Card
When I was in college I used a credit card to pay for certain miscellaneous expenses.  I didn’t have a big bill every month so I made enough from my campus job to pay off the balance and after four years I had established a flawless credit history.

Build a Good Credit History
When I went to rent an apartment right out of school the building manager was very pleased when he ran my credit report and commented at how very few college grads have a positive credit history.  With more and more businesses using your credit report to gauge risk, having a positive history once you leave school can be very helpful.

Buying a House – For example, when my wife and I went to buy a house a few years out of school, I was eligible for a great interest rate based on my credit history.  My wife on the other hand never had a credit card or any type of loan payment so she had zero credit history. 

Putting her name on the loan would have required us to pay a higher rate on the money we were borrowing so we left her off entirely. She was kind of upset, she had avoided opening a credit card in college to be financially safe but down the road her lack of a credit report worked against her.

No Late Payments or Balances – A key point to remember here is that this approach only works if you make your payments on time each month and don’t leave school with a pile of credit card debt.  A history of missed payments or a big balance will hurt, rather than help, your credit score.

Choosing a Credit Card
The criteria for finding the right credit card for college students should be:

• No annual fee
• Low annual percentage rate (APR)
• Free online account access and management

The emphasis here is on keeping any fees to a minimum and making it easy to manage and pay your credit card bill.  Even though you don’t want to carry a balance, you should still look for the lowest APR in the event there’s a month where you’re charged interest. Most of the student cards offer an introductory period where you pay 0% interest but remember it’s only for a short time period, typically 3 – 6 months, and then the APR goes up.

One other thing to look for in a student credit card is a free rewards program.  If you’re not going to be putting a lot of expenses on your card then it’s not as important but if you plan on charging larger amounts then a rewards program can pay off.

Best Student Credit Cards

In terms of APR, the Citi Platinum Select Card for College Students has the lowest rate available today for students.  Since it has the best interest rate along with no annual fee and free online account management it would be a good choice.  The one thing it doesn’t offer is a rewards program, which leads us to the next student card.

Charge Wisely
If you’re smart about how you use credit in school you can graduate and enter the “real world” with a good credit history.  If it sounds like too much work to manage a credit card or too much temptation to overspend then you’re better off just paying by cash or check in your college years.

This review of the best student credit cards and how to build/protect your credit history in school is part of the College Student Money Guide.

Equifax ID Patrol Review – A Good Choice to Monitor Your Credit Reports and Protect Your Identity?

Equifax’s ID Patrol, a new identity theft protection and credit monitoring service, launched recently and I used a promotion code to sign up for a free trial. I’m a big fan of credit monitoring services, as you could probably tell from my True Credit review, especially if they offer identity theft protection as part of the package deal. So, lets review how ID Patrol stacks up against the competition.

Let’s start with a quick walkthrough. To sign up for the service I went to Equifax.com.

It was pretty simple to locate their ID Patrol product since they have a huge banner on the front page.

Then I logged into my account with Equifax. (You can create one for free if you don’t already have one, you don’t have to sign up for anything.) Once I signed up for ID Patrol I was taken directly to a page that showed me my current credit reports at all three bureaus.

Aside from having all three of my credit reports on the same page, my debt-to-credit ratio at all three bureaus was clearly spelled out. The entire thing was easy to read and pretty comprehensive. They get points for that in my book – I’m busy, and if I have to take 30 minutes just to figure out how to use a service I’m paying for, then I’m not a happy camper.

I was pleasantly surprised that all of the main ID Patrol features were visible on the front page and it took me very little time to figure out how to use them.

At first glance this service has a ton of features. You can:

• View your current credit reports at all three credit bureaus.
• Freeze your Equifax credit report with the click of a button.
• Get email alerts any time something changes on your credit reports.
• They monitor suspected internet trading sites (The ones that buy and sell people’s information and credit card numbers.) and they will alert you if your information shows up on a “for sale” list.
• You get up to $20,000 of identity theft insurance as part of the ID Patrol package.
• They have “Identity Theft Resolution Specialists” on call 24/7 in case your identity does get stolen.

Now, since most credit monitoring services offer you three-in-one credit reports, account freezing, and email alerts, I wanted to take a closer look at the other main features to see if the service was really worth the $14.95 a month.

Equifax WebDetectâ„¢ – Suspected Internet Trading Site Monitoring:

It took me about three seconds to add my social security number to the list of numbers that ID Patrol actively searches for over the internet.

The cynic in me was hoping that they didn’t just Google my Social Security number. There is no official list of sites that they monitor since they are supposedly “underground, illicit information trading sites.”

I was not 100 percent sold on this particular feature. I mean, to my way of thinking, the identity thieves who are selling information are probably selling large lists at a time – and I doubt seriously that they are letting prospective buyers “Get a peek” at said lists before they pay for them.

So…if that’s the case, how could Equifax monitor those lists for my information, unless they are buying the lists themselves? It just does not make sense to me.

Giving them the benefit of the doubt though, if they did find my information on an “illicit list” then the email alert might give me time to freeze my credit reports and call my bank before any charges were made.

$20,000 of Identity Theft Insurance:

Now the truth is, when your identity is stolen and fraudulent charges are made on your credit cards you are not liable for more than $50 per card. Here’s a quote from the FTC:

• Your maximum liability under federal law for unauthorized use of your credit card is $50.
• If you report the loss before your credit cards are used, the FCBA says the card issuer cannot hold you responsible for any unauthorized charges.
• If a thief uses your cards before you report them missing, the most you will owe for unauthorized charges is $50 per card.
• Also, if the loss involves your credit card number, but not the card itself, you have no liability for unauthorized use.”

However, if your bank account information is stolen you could end up being liable for all the charges that were drawn on your account between the time that your information was stolen, and the time that you reported the theft to your bank.

I was surprised to find that the $20,000 of Identity theft coverage also pays for:

• The cost of getting notarized fraud affidavits.
• The cost of sending certified letters to your creditors and the police.
• If you have to take time off of work to straighten the mess out they could reimburse you up to $500 per week, for as many as four weeks.
• “Reasonable” attorney fees, long distance phone calls to your creditors, and, if you had to close out your previous accounts, they even pay for new loan application fees.

24/7 Identity Theft Resolution Specialists:

A search of Experian’s website did not reveal a special number for ID Patrol users to call in case of fraud. They do list an automated 24 hour phone number – so I called it. Disappointingly all it did was give me instructions on how to place a fraud alert online.

Two things here:

1. You don’t have to use Equifax’s ID Patrol Service in order to call their number and get automated instructions. That service is available to everyone, so no real reason to pay extra for it.
2. If you really think your identity has been stolen, then you need to freeze all three of your credit reports completely – not just place a fraud alert. Most lenders will refuse to issue you credit if you have a fraud alert on your account – but not all of them. When you freeze your credit report it means that lenders literally cannot pull your credit score to give you a loan, so it’s far more effective than just an “alert”.

In Review:

I am actually going to ditch my first love (True Credit) for this service. Why? Because I am currently paying $15 a month to monitor all three of my credit reports with True Credit, and it has no identity theft insurance. With ID Patrol, I get all three reports, plus the identity theft insurance for $14.95.

Even given the dubious nature of some of the features, it comes down to price vs. functionality, for me. ID Patrol has the extra features that I want, it’s basically the same price, and it’s easier to use.

Another priceless bonus is this: The only ads I ran across while using ID patrol were for an Orange Checking Account at ING Direct, and a Home Depot Account. True Credit’s pages are swimming in targeted advertisements, and that gets old fast.

So, what do you think? Is Equifax’s ID Patrol Service worth $15 a month? Would you use it?

Best Credit Cards for New College Graduates & Young Professionals

The best credit card for you will likely change along with your financial circumstances.  As you graduate from college and get a job, you’ll want to do a review of your finances and your current credit cards to make sure you’re taking advantage of the benefits your new salary might bring. 

Many people unfortunately rely heavily on credit in school because they don’t have much money coming in. However, once you graduate and find a job you’ll finally have a regular income. Not only will this allow you to start paying off the debt you might have accumulated during your college years, it may also mean you’re eligible for cards with better features. Here are some tips to follow as you search for the best credit card for a new college graduate.

Tip 1:  Upgrade your Credit Card

If you have a student credit card, chances are the interest charged on unpaid balances is higher than it needs to be. In order to offset the higher risk of students defaulting on credit card debt, student cards tend to have higher rates and lower credit lines.

If you were able to establish good credit while in school here are some of the best credit cards for you:

Blue from American Express

Blue from American Express has an introductory period of 0% interest for purchases.  You can’t get a rate any lower than zero and after the introductory period is over the rate is still one of the lowest around for credit cards. 

The Blue card does offer a rewards option through the Membership Rewards Express program. You could instead opt for the Blue Cash card if you have an excellent credit history.  Blue Cash can pay up to 6% cash back if you have the preferred version.  Both the Blue Cash Everyday and Preferred give you higher cashback at supermarkets, gas stations, and supermarkets. The Everyday card has no annual fee but pays a lower cash rebate, the Blue Cash Preferred does have an annual fee but pays 6% cash back on groceries and 3% back on gas and department stores.

Although student lines of credit are excellent to have during school to help to establish a credit history, now that you have a salary coming in, you’re likely eligible for a new card that offers more benefits.  Things to look for are a lower interest rate and a rewards program.  Of course the quality of card you’re eligible for will depend on your credit score.

Tip 2: Don’t Close Your Student Line of Credit

Many people make the mistake of closing their student line of credit because they have a better line of credit opened.  Ironically, this is a move that could actually cause your credit score to drop.  The problem is that lenders look for long term credit history on your credit report since a credit history helps establish your ability to repay on time and makes companies more willing to extend you credit. 

You can check your current report for free once a year with AnnualCreditReport.com.  You can also check out your FICO score in addition to your credit report at places like myFICO and GoFreeCredit.  There is a fee for the service but they do offer a free trial.

Tip 3: Watch Out For Balance Transfers

With your lower interest rate on a new credit card, you may be tempted to move your existing student credit card balance to a new line.  This may not be a bad idea but watch out for the high balance transfer fees often in place.  You also want to look for a card that offers a low APR on balance transfers (even a 0 percent APR) so you save money.

How you could take advantage of this is to move your balance on an existing student card over to the Discover card when you signup.  You’d have 12 months of no interest payments so the money you paid each month would go toward paying down the balance instead of towards interest.

Tip 4: Use Credit Responsibly

Now that you have a better credit card in your hand use it wisely.  Don’t create more debt for yourself with irresponsible spending.  As a new college graduate, you are likely looking for a home, furnishings, a car, or even to start your own business.  You’ll have plenty of opportunity to spend money, if you charge things on your card make sure you have the cash to cover them.  Pay off your credit card each month to continue to build a credit history and to avoid interest charges.

If you haven’t had a chance to build your credit history yet or have bad credit there are a few options for you. The downside is that you’ll have to pay an annual fee due to your bad credit.  The upside is you may still qualify for a credit card and if use it wisely you can rebuild your credit.

Tip 5:  Research Your Credit Card Options

There are many different cards available with a wide array of different card features.  Make sure you research your options before applying for a new card. You can call up your current card provider, explain your situation, and ask what cards you’re eligible for now that you have a regular income.

There are many sites online that you can use to review and compare different credit cards.  Some of the things to look for are:

• Low APR on purchases
• Low APR on balance transfers
• Low Balance transfer fees
• No Annual fees
• Cash Back options
• Travel rewards
• Gas rewards
• High Rewards earning limits
• 0% APR deals on card purchases and balance transfers

College Graduate Finance Guide
This article wraps up the personal finance tips for college graduate series.  Here is a summary of all the financial topics we covered:

• Investing for College Graduates
• Health Insurance for College Graduates
• Student Loan Tips
• Spending & Budgeting for College Graduates

Did You Know Your Credit History Can Affect Your Insurance Rates!

Last week, I got a surprise bill in the mail. Based on my credit score, my auto insurance increased by 40%! Ouch!!! What is going on? I pay all of my bills on time, and I usually pay extra on my credit cards.

Recently, my credit rating plummeted. What did I do wrong? First, I decided to consolidate my credit card bills. Since I believe I am responsible for every penny of the debt, I did not go to some sort of agency to short-change the card companies. Instead I transferred the balance from one card to another. Big mistake!!

Why? I did not know that I needed to contact the credit card company to close the old account. Plus, closing the account is only half the process. I needed to have the credit card company send a letter to the three credit reporting agencies and let them know my account was closed in good standing. Not only do I need to do that for credit cards that are paid in full, I need to consider my old student loans.

The loan company that carried my subsidized and unsubsidized student loans still shows on my credit report as active. Okay, I am so confused!! The account balances were transferred and consolidated to a bank upon my graduation-3 years ago! Why are the accounts still open, as if I am going to ask for more college money? I need to have those accounts closed and ask the company to send a letter to the reporting agencies saying they were closed in good standing in 2005.

I had no idea my credit score could have such an impact on my insurance rates. Now I don’t know if or when my auto insurance will ever go back down. However, I have learned a very valuable, all be it expensive, lesson. Close accounts that you do not plan on using in the future; but, do not assume everything is great. Request creditors send a letter to let the reporting agencies to let them know you are in good standing with the company.

Otherwise, you may watch your insurance raise by a ghastly amount! It seems many insurance agencies are starting to include credit reports in figuring the premium. Check yours out! Do not be like me and learn the hard way.

Has your credit score had any impact on your insurance rates?

Tina

How to Get a Free Credit Report

If you are interested in purchasing a home, buying a car, or getting a loan for any reason, your lender is going to ask you for the information necessary to get a credit report. Depending on the results of the report, you will be able to obtain a loan or be rejected. So, if you want to know before asking, you can get a free credit report.

Well, since I watch television, I am also subject to the ever-so-frequent commercials. I remember the advertisement for freecreditreport.com AnnualCreditReport.com. So, before writing this post, I decided to try it out for myself.

The entire process takes 5-10 minutes. You fill out a couple of questions to verify who you are, type in your social security number, and wait approximately one minute. Although it is very easy, and the reports are concise and simple to understand, I must admit it is disconcerting all the same.

In a matter of a minute, I had a record of where I have lived over the past 10 years. The computer knows things about me I couldn’t even remember. For example, when we lived overseas, my ex gave them his dad’s address as a permanent state-side address for legal purposes. Also, I was informed that I have purchased a car last October and the name of the Bank was one of my ID questions. No wonder ID theft is more prevalent today.

Anyway, the screen gave me information account by account. I know whether I am current on all of my loans or credit payments. I also know the exact total amount of my debt and the reason for the lender.

Then, I am told my ranking, compared to the general population in the United States. I am not sure if this is supposed to make me feel worse or better.

Finally, the report tells me my overall credit score. Below the score, it also states how they calculate the score so if its good you understand why and if not you know what’s necessary to improve your number.

Since it is free, I only got a score from one of the three credit sources. According to the results, the other two credit calculating agencies might have slightly different numbers. If I want to see their calculations, I need to pony up some cash. No thanks! I seriously doubt that it will be a significant enough discrepancy to matter.

Do you have other ideas on how to get a free credit report?

Tina

Credit Cards: Friend or Foe?

Is your credit card your friend or foe? Is your mailbox inundated with tempting offers, from competing financial institutions, for additional credit? Are you tempted to check out the offer, or do you drop the envelop straight into the shredder?

Have you noticed that the more credit card debt you experience, more offers flood the mail? What is up with that!? Obviously, banks are more concerned about making money than the consumer’s financial stability. So, it is up to you, and me, to make the right choices.

So, how can your credit card become your friend?

1. Travel Safety

Honestly, credit cards can be a blessing, but only if they are used to your advantage. For example, I do not like to travel with a wad of cash in my pocket. I would prefer to put the trip on the card and carry a minimal amount of paper money in my purse. If I lose the money, I am in big trouble! If my card is misplaced or stolen, I can call the company, have the card cancelled, and protect my credit from theft.

2. Reap the Rewards

My father-in-law travels frequently. To save money, he has a card with frequent flier miles added with every purchase. So, he buys groceries and pays all of his bills via his credit card. Thus, the miles add up quickly, and he saves a bundle at the travel agency and definitely reaps the rewards.

3. Establish Good Credit

For individuals trying to establish good credit, having a card is a good start. The better you can handle the credit you have, the better credit score you will achieve, and lenders will be more likely to loan money for an automobile, house, or other large expenditure.

How your credit card becomes your enemy:

A purchase here, a purchase there, and pretty soon the card is maxed out. Then, here come the bills. While the card seems like free money at the time, your purchases, plus the interest, can really bust a budget.

To get a clearer picture, exercise your Internet search engine and find a credit calculator. Put in the amount of your debt, the interest percentage rate, and the scheduled minimum payment. If you never charge another dime, I promise you will still have quite a shocker. The calculator will tell you how many months it will take to bring the balance to zero. The number of months, times the minimum payment, will result in a much larger debt than the original amount charged.

So, how can keep your card a friend, and keep from turning into a foe? The answer is simple:

Do not spend more than you can afford to pay at the end of the month!

Rack up those frequent flier miles, feel safer on vacation, and begin building your credit for the day you want to buy a home or a car. But, do not carry the credit over to the next bill. Use credit unwisely, and the card will be your foe in no time at all. Avoiding spending money you do not have and a credit card will remain your friend.

Is your credit card your friend or foe?
Tina

How to Start Your eBay Business Without Credit Card Debt

Do you want to start your own eBay business with minimal risk and no debt? I’m sharing the steps I took to build my eBay business and giving away a free multi-part tutorial on how to get started. Sign up for the free tutorial with the adjoining form and get started today!

Is it wise to go into debt when you’re starting a business? Do you have to borrow a chunk of money or is there any other way get started? I had a reader email me in response to my post on using credit cards to buy eBay inventory.

“Many small businesses use credit cards to fund their initial expenses.  A lot of times when you’re just getting started you need some seed money and credit cards are a simple way of getting it.  Sure there’s the risk you’ll carry a balance for a while until you become profitable but isn’t assuming risk just part of doing business?”

Startup Money
The saying goes “it takes money to make money”.  The good news is you don’t necessarily need a lot of money to get started.  The very first thing that Guy Kawasaki tells us in the “Art of Bootstrapping” is to focus on cash flow.

“Focus on cash flow, not profitability. The theory is that profits are the key to survival. If you could pay the bills with theories, this would be fine. The reality is that you pay bills with cash, so focus on cash flow. If you know you are going to bootstrap, you should start a business with a small up-front capital requirement, short sales cycles, short payment terms, and recurring revenue. It means passing up the big sale that take twelve months to close, deliver, and collect. Cash is not only king, it’s queen and prince too for a bootstrapper.”

Bootrapping on eBay
eBay fits Guy’s requirements pretty well. You can start off only selling one or a few things so the up-front capital requirement is small.  Auctions can last 3-10 days so the sales cycle is short, unless you sell in an eBay store which may have longer inventory turns. You can set your own payment terms, if you only accept PayPal then most people pay within a day or two of winning the item.  The recurring revenue of course depends on you finding new products to sell but the good news is products are everywhere.

Why Go Into Credit Card Debt?
The reader mentions that many small businesses use credit cards to get started. While this may be true, I would ask, why take on high interest debt when you don’t have to?  You can actually be profitable and have positive cash flow after your first sale on eBay, why go into debt that will just eat into your earnings? 

Of course, the way to keep initial capital requirements small for an eBay business is to start only selling a few things.  As you make money on the initial sales, you can re-invest the profits into additional inventory and grow the business without debt.  If someone is looking to start out with tons of inventory and sell hundreds of dollars of goods a week right off the bat, they may have to borrow money up front.

Alternative Funding
If you don’t want to go into credit card debt to start making money online you can always pursue other, less expensive funding sources such as taking out a second mortgage, dipping into personal savings, borrowing from friends or family, taking out a bank loan, or borrowing on Prosper.

eBay & Prosper
eBay is actually hosting a Prosper forum today for people interested in borrowing startup money on Prosper.com. Run by Prosper Marketing Director, Shira Levine, it will go over some of the basics of small business finances. Here is summary of the forum:

“We’ll cover the five basic questions every business should ask themselves before you finance, how to know where you stand financially, and the importance of cash reserves in your company. Then we’ll cover financing basics: debt vs. equity, credit scores and reports, and common pitfalls to avoid. The workshop will end with how to create an excellent loan listing on Prosper that will get your business funded.”

Credit Card Funding
Of course everyone’s situation is different and using a credit card as a funding source might work out for some people.  However, if you want to avoid high interest charges and are willing to start small and grow your sales over time then it’s possible to start making money on eBay without going into credit card debt.  Are there any other alternative funding strategies that I missed?

The 10 Worst Credit Card Mistakes College Students Make

Blueprint for Financial Prosperity had an article the other day about college students establishing credit by signing up for one of his favorite student cards. I’m glad I had a credit card in college, it helped me build up my credit score. However, in my time at school I saw many mistakes being made with credit cards, here are 10 of the worst in no particular order:

1) Opening a Credit Card for Free Stuff
Whether it’s on the beach over spring break or in the student lounge, booths giving away a free a hat or T-shirt in return for opening a credit card are bad news. Even if you never use the card it shows up on your credit report. After opening several cards for a few freebies your credit score probably won’t look so pretty.

2) Open Door Policy
The dorms were a great place to hang out when I was in school, you could drift in and out of rooms down the hall just shooting the breeze, playing video games, or watching Sports Center. Most people left their doors open and if they didn’t you knew their lock combinations. There usually wasn’t much of value in a college student’s room, except credit cards that is. There were several instances where someone’s credit card was “borrowed” for a spending spree or used to pay for adult phone conversations.

3) Speculating on Credit
I have to admit, I love playing poker. Unfortunately the recent proliferation of online gambling sites has made it way too easy to blow tons of money playing online. When you have an hour to kill between classes, it’s tempting to sit in the library computer lab and test your fortunes. What’s worse than losing all your money in poker? Losing money borrowed at over 15% interest!

4) Taking the Card out for Night on the Town
Friday night was a great time in college. The weekend was full of potential as you hit the town with a date or a group of friends. Unfortunately, the money often ran out long before you were ready for the good times to end. If you had the credit card along, you could always rely on it to keep the party going. Just remember, the only thing worse than a hangover is a credit card hangover!

5) Carrying a Balance
I have friends in their 30’s still paying off student loans with pretty low interest rates. With today’s credit card rates of at least 15%, if you carry a credit card balance as a student you will be paying off those debts for a loooong time.

6) Opening Store Credit Cards for Discounts
It seems every time you buy something at Best Buy, the Gap, or any other retailer they always ask if you’d like to save X% today by opening a store card. When you’re a broke college student the idea of saving money sounds great! However, if you open a card at every store you shop at it will hurt your credit score. Plus if you have all those cards, you’re probably more likely to spend more money.

7) Overspending, then Reporting Your Card Stolen
I knew of several cases in college where someone charged hundreds of dollars they didn’t have over Spring Break, then called up the credit card company claiming their card had been stolen and that the charges weren’t theirs. Not much to say about this one other than it’s breaking the law and don’t do it.

8) Buying an Engagement Ring
It’s senior year and you’ve found “the one”. The only problem is she wants a big rock and you’re a poor college student with no money. Of course you love her and want to make her happy, and you don’t want to hear comments about how small the diamond is for the next 20 years. Many people turn to credit cards happily offered by Zales, Helzberg, or whatever the store may be.

My question for you, do you really want to start your marriage off with thousands of dollars of debt just for a piece of compressed carbon? I know, I know that argument probably won’t fly with the Missus. If you don’t have the money for the ring she wants be creative. Find a way to talk her into downsizing, borrow from your parents, or do something other than going into debt for diamonds!

9) Paying For Friends
The great thing about college life is the people you go through it with. Countless midnight pizza runs, poker late into the night, and road trips all build memories that last a lifetime. When you’re headed out for one of these adventures you don’t want anyone to be left behind because they don’t have the cash. It’s so easy to say, “I’ll put it on my card” or “the next round’s on me”. I’m not saying don’t help out your friends. Just make sure you have the money to pay the bill and that you’re not doing it all the time.

10) Forgetting to Pay the Bill
College is full of classes, sports, homework, parties, dating, and just learning to be on your own for the first time. Who has time to remember to pay the credit card bill? Plus if your dorm room is as messy as mine was you probably couldn’t find it even if you remembered! The unfortunate part is that missing your payment will not only cost you a $30 late fee you don’t have the money for but even worse it will put a mark on your credit history that will follow you around for years once you’re out of college.

Credit Card Cum Laude
If you can avoid making these mistakes you should graudate not only with a college degree but a good credit report and lots more money in your pocket!

How to Borrow Money if You’re Bankrupt

One of the most difficult situations to overcome is bankruptcy. When you declare bankruptcy, it can be difficult to recover – and to convince creditors to lend to you again.

While it might be difficult to find lenders after you file for bankruptcy, it is possible to borrow money even in this dire situation. Getting to that point might require some hard work on your part, though.

You Can Borrow as Long as Someone is Willing to Lend

Understand that anyone can borrow any amount, as long as a lender is willing to take a chance. Even if you are bankrupt, you might be able to find lenders willing to work with you. Realize, though, that if you are in an open Chapter 13 bankruptcy, you will need to get permission from the bankruptcy court to borrow.

Consider looking for lenders that specialize in poor credit loans and after-bankruptcy loans. Understand that you will likely have to accept the following conditions if you borrow money following a bankruptcy filing:

• Much higher interest rate
• Willingness to secure the loan with some sort of asset
• Smaller loan amount

Because you have shown yourself a credit risk, lenders want to protect themselves, and this means that you will pay a higher price in order to borrow money. As you make your payments on time and in full, though, your credit should improve, and you will have access to better terms.

Improve Your Credit First

In many cases, it makes sense to improve your credit before you try to borrow after a bankruptcy. The first step is to make all of your payments – from utilities to insurance premiums to credit cards – on time. One tactic many use following bankruptcy is to apply for a secured credit card to help rebuild credit by showing responsible habits. You can use alternative credit scoring, like that offered by eCredable and PRBC to establish a positive payment record with non-credit accounts.

Overcoming a bankruptcy is not something that can be done overnight. You will have to show responsible behaviors for 12 to 24 months if you want to be considered by many more traditional lenders, especially if you want to try to qualify for a mortgage. Work to boost your credit score, and you’ll be more likely to be seen as an acceptable risk moving forward.

Add a Statement to Your Credit Report

It’s also possible for you to add a statement to your credit report. If your bankruptcy was the result of circumstances beyond your control, such as a major medical catastrophe, a messy divorce, or a job loss followed by a long period of unemployment, you can add a statement to your credit report. This statement tells your side of the story, and might help some lenders decide to take a chance on you after all.

In some cases, a lender might require you to create a statement for submission with your loan application. Your statement should concisely describe the conditions that led to your bankruptcy, as well as outline what you have done to improve your situation, and your plans for improving your financial management in the future. There are lenders that understand extenuating circumstances, and a well-written statement can go a long way toward helping you qualify for a loan.

Bottom Line

You can borrow money if you are bankrupt. However, you need to be willing to pay a higher price, and take extra steps to show that you are capable of meeting your obligations this time around.

Have you gone through bankruptcy? Tell us your story and if you can still borrow money. Leave a comment!

This article was originally published January 23, 2013.

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