If you're in credit card trouble, you're not alone. Credit card debt is at an all-time peak, with the average American household carrying a balance of roughly $7,500 - $8,000. Consumer complaints are running high, too. If you are trying to solve your debt problem, or feel your credit-card company has treated you unfairly, several reputable organizations may be able to help you.
» Before you take action, it's best to know the facts, and one of them is your credit rating.
Your credit rating, or FICO score, is a crucial piece of information that may determine, among other things, the interest rate your credit card company charges you. Yet many Americans don't even know how that number is computed, much less what their own score is. FICO scores are determined by many variables, but mainly reflect your financial history of paying off your cards and other loans and how much you currently owe. To learn more about the company that computes FICO scores, Fair Issac, as well as the national credit bureaus -- TransUnion, Experion, and Equifax -- check out our report "Credit Scores - What You Should Know About Your Own." You can also download the booklet "Understanding Your Credit Score" [pdf file] which is published by Fair Isaac on its Web site. [Note: This is a pdf file; Adobe Acrobat required.]
» Once you feel you're ready to file a complaint, you'll need to figure out which agency is best suited to helping you:
If you have a problem with your credit card, first try to resolve it directly with the store or the credit card company.
The Better Business Bureau can act as an intermediary to help resolve your dispute, and it's easy to file a complaint online. Complaints are handled by the local Better Business Bureau where the company is located, not where you live -- so be sure you know where your credit card company is headquartered.
If that doesn't work, you may want to file a complaint with your state's attorney general or banking agency. You may also file a complaint with the federal agency responsible for enforcing consumer credit laws for your credit card company.
• Credit cards issued by state banks that are members of the Federal Reserve System:
Federal Reserve Board
Division of Consumer and Community Affairs
Mail Stop 801
Washington, DC 20551
• Credit cards issued by banks with "national" in the name or "N.A." after the name:
Comptroller of the Currency
Office of the Ombudsman
Customer Assistance Unit
1301 McKinney Street, Suite 3450
Houston, TX 77010
(800) 613-6743 (toll-free)
• Credit cards issued by state banks that are not members of the Federal Reserve System:
Federal Deposit Insurance Corporation
Consumer Response Center
2345 Grand Boulevard, Suite 100
Kansas City, MO 64108
(877) 275-3342 (toll-free)
• Credit cards issued by federal savings and loan associations and federal savings banks:
Office of Thrift Supervision
1700 G Street, NW
Washington, DC 20552
(800) 842-6929 (toll-free)
Answering "yes" to just one of these questions could mean you need help:
• Do you take cash advances to pay daily living expenses?
• Pay important payments such as rent or mortgage late?
• Borrow from one lender to pay another?
• Sign up for other cards because I hit the limit on my current cards?
• Transfer balances to new accounts to avoid paying off debt?
Fix it yourself:
• You may be able to solve your debt problem simply by managing your money a little more carefully.
• Add up your debt to get a realistic picture of your financial situation.
• Stop charging. Put away your cards.
• Read your past few statements to see how you've been spending your money. Use the information to make a monthly budget and stick with it.
• Look for areas where you can cut back, spending, and use that money to reduce your debt. Eat out less. Cancel your cable. Take the bus. Avoid late fees by paying your bills on time.
(The above advice is from the American Bankers Association Education Foundation.)
• Credit cards associated with federal credit unions:
National Credit Union Administration
Office of External Affairs
1775 Duke Street
Alexandria, VA 22314-3428
• Credit cards issued by finance companies or stores, and matters related to auto dealers, mortgage companies, and credit bureaus:
Federal Trade Commission
Consumer Response Center
6th and Pennsylvania, NW
Washington, DC 20580
(877)-FTC-HELP (1-877-382-4357) (toll-free)
» After you've got your problem resolved, don't let it happen again! To become "financially literate," check out any of the following Web sites and programs:
Designed especially for college students and funded by MasterCard and the Consumer Federation of America, this Web site offers free downloadable tools that teach "responsible money and credit skills." In about 45 minutes, the package -- which includes a video and a PowerPoint presentation -- covers not only the fundamentals of credit but also basic budgeting, the difference between debit cards and credit cards, and more. Teachers and counselors may be interested in presenting the program to groups.
Another MasterCard-sponsored resource for students, CreditTalk can help you obtain a credit report (and decipher what it says), create and manage a budget, calculate how long it takes to pay off a balance, and, in the worst case, deal with a debt crisis. There's also a glossary of financial terms and a list of links to credit counseling agencies.
If you feel like your credit card company did you wrong, you'll find empathy here. Just reading one person's horror story ("Providian Raised My APR to 29.99%") may make you feel better, or possibly worse, if you're a Providian client. There's plenty of advice too, including tips on avoiding holiday debt and teaching kids the value of a dollar. And after you've learned something from the site, there's a chance to prove it with a section of quizzes.
The National Foundation for Credit Counseling has set up this site to help consumers understand the basics of credit and to hook them up with counselors who offer free or low-cost advice. It also has a special section for homeowners who need advice with their mortgages. Helpful tools include a checklist for ensuring that a credit counseling agency is trustworthy and a list of groups qualified to receive free credit reports. (If you're not among them, there's also advice on how to obtain a credit report for a small fee.)
This Web site's motto is "Comprehensive. Objective. Free." All true, especially the "comprehensive" part -- there's everything from an advice column called "Ask Dr. Don" to a feature on why NFL tickets cost so much. Far more than a credit card site, Bankrate also covers mortgages, new and used car loans, money market accounts, certificates of deposit, checking and ATM fees, home equity loans, online banking fees, and unclaimed refunds from the Internal Revenue Service. If you're Canadian, you won't be needing that IRS info, but there's an entire section devoted to the finances of America's neighbors to the north.
Credit cards, debit cards, smart cards, prepaid cards, ATM cards, loyalty cards, phone cards -- if it comes in plastic form, it's on this site. Some information is meant for industry insiders, but check out the consumer pages. There's a list of different incentives offered by each card such as discounts and airline upgrades, a section with the latest news stories on cards, and a free weekly e-mail newsletter.
The Jump$tart Coalition for Personal Financial Literacy
Jump$tart, funded by a grant from American Express and supported by donations from other financial organizations, offers instructional material on personal finance, largely intended for educational institutions. The Web site provides several resources, including a database of instructional material available from a wide spectrum of providers, contact information for guest speakers on personal finance, upcoming teacher training seminars, and a list of finance-related Web sites.
Visa's Practical Money Skills for Life Program
PracticalMoneySkills.com is a free Web site designed to help teachers, parents, and students make better financial management decisions. It provides online resources, including free instructional material for classrooms, that teachers can use to educate students about personal finance. School districts, conference organizers or associations may request a presentation from a representative of the program, funded by Visa.
The Federal Deposit Insurance Corporation (FDIC), an independent agency of the federal government, offers a training program designed for people unfamiliar with the financial industry. It provides education on important financial issues -- including credit, home ownership, loans, and consumer rights, among other topics. MoneySmart offers free videos of its educational programs to banks and other organizations interested in sponsoring financial education workshops for customers.
The National Endowment for Financial Education
NEFE provides funding, logistical support, and financial planning expertise to create personal finance programs and materials for the public. Educational programs offered by the organization focus on increasing financial literacy among the nation's youth. The organization offers instructional materials for its programs free of charge. NEFE, a nonprofit organization, also underwrites grants, fellowships, and research projects.
Millions of Americans are mired in debt; here's where some of them come to talk about it. You'll have to register to get access to the bulletin boards and chat rooms, but the news ticker is available to all.
American Bankers Association (ABA) Education Foundation/Consumer Connection
The ABA Education Foundation provides resources to bankers, parents, and educators that teach adults and children about personal finance. The foundation offers booklets, CDs, brochures, videos and a newsletter to provide education about credit, banking services, credit card debt solutions and consumer protection, including easy-to-use online guides to prevent and resolve identity theft and other financial scams.
This Web site is sponsored by the grassroots organization Citizens for Fair Credit Card Terms, Inc. (CFCCT). It offers ratings and customer reviews of over 1,000 credit cards.
Excellence in Economic Education
The Excellence in Economic Education Program, part of the No Child Left Behind Act, is intended to promote economic and financial literacy among all K-12 students. The U.S. Department of Education will be authorized to make one competitive award to a national nonprofit organization to improve student understanding of personal finance. (As of Nov. 24, 2004, the program is awaiting Congressional approval for $1.5 million in funding.)
The passing of the Fair and Accurate Credit Transaction Act (FACT Act) in 2003 established the Financial Literacy and Education Commission to improve Americans' financial literacy. Run by the Security and Exchange Commission's (SEC) Office of Investor Education and Assistance, the commission's Web site serves as a repository of links to educational materials from across the spectrum of federal agencies that deal with financial issues, including credit cards.