10 things you may not know about credit

The average American family owes some $4,088 in credit card debt. Here are ten things that you may not know that can keep you out of debt.

Individually and collectively as a people, we Americans are in debt up to our eyeballs. The average American family owes $4,088 in credit card debt. This is up 55% over te past few years. And with the current economy, that balance is getting worse, not better. There was a time when I got into trouble;e with the credit cards. When I got my first apartment, I would use my new credit cards to buy just about everything, never considering how I was going to pay them off. I bought a brand new television and stereo and then every week I would go out and get a couple of music albums to play on the brand new stereo. I bought groceries, clothes, and even toiletries with the cards. And one time I even paid the rent by borrowing cash on the card. Pretty soon, I had accumulated over $10,000 in debt on the credit cards. Finally it was either suck up and stop using them or file bankruptcy. I cut up all the cards and threw away the 4-6 offers I got in the mail every week. Then I started paying them down. I saved every penny and paid well over the monthly balance. Even then it took years to pay them off. According to the St. Louis Post Dispatch, it takes 3.6 years to pay off $1,000 in credit card debt. Here are some other credit facts that you may not be aware of: If you pay the $30 minimum monthly payment on a credit card balance of $3,000, it will take forever and a day to pay off the balance. You have to pay considerably more than the minimum monthly payment to pay it off. If you buy a refrigerator for $1,000 and make 12 monthly payments of $100 or borrow $1,000 from a bank at 20% interest and then pay for it in full a year from now, which is cheaper? A. You'd be better off borrowing the money at 20% interest and paying it off sooner than you would by making the $100 monthly payments. If I cancel some of my credit cards, will it improve my credit score? A. No. Credit card companies base your credit score on things like how many cards you have and how much interest you pay. Paying some of them off early will make it look like you are getting closer to maxing them out. Which one of these are NOT considered when you apply for credit? 1.Race 2.Martial status 3.Employment 4.Age 5.National origin A. None of these can be considered legally. How long does it take before a bankruptcy stops affecting your credit score? A. Forever. While most lenders' won't see the bankruptcy after 10 years, if you apply for a large loan, they will see it. Will filing for bankruptcy cover my student loans? A. Yes. Even though most student loans are from the government, they are still covered. And finally, if one of my credit cards is stolen and the thief runs up $1,000 before he is caught, how much of that will I be liable for. A. In most cases, nothing. Although some banks may charge you $50. That is the maximum allowed by federal law. Source: http://www.stltoday.com/mds/news/html/2305