One of our readers, Leigh, sent us this question:

If I have decided to close an account, what is the optimal length of time to leave that account open before I give it the heave-ho?

I have a cc with a TERRIBLE interest rate that I just opened 5 months ago, the lender drives me crazy, and I will never use the card again. Someone told me that it is better to leave an account open for 12 months before closing it, and that this will not hurt your credit score. Is it true that your score will be hurt if you close an account that you’ve only held open for a few months?

Thanks for your question Leigh!

The truth is, closing a credit account will lower your credit score no matter when you do it. Even if you wait.

The average age of your credit accounts is roughly equal to fifteen percent of your FICO score. When you close a credit card, this is the percent of your score that is affected. If you have older credit card accounts that are still open, then closing out this new account will have very little impact on your score.

Now, closing this account will also affect a couple of other things too. If this card has a high limit, you may not want to close it out - just stop using it. Your debt - to - credit ratio (how much of your credit you have used, vs. how much you could use) is 30 percent of your FICO score.

So, if this card has a high available balance that you are not using, or you are running close to your limits on other cards, then it makes the most sense to leave it open.

Lastly, new credit counts for ten percent of your FICO score - and this is probably the reason why your friend suggested that you wait a year to close the account. However, if you are handling your credit correctly, then you do not need to be afraid to close the account.

The better you handle your credit, the less it will hurt you to close out a credit account. If you carry a balance, or charge more than 25-30% of your available credit each month, then it will hurt your score to close this card out. If you are not doing those things, then go ahead and close it out because your score will recover in a few months.

There are quite a few die-hard FICO fanatics who will disagree with me telling you to close this account out. Yes, it will hurt your score no matter when you close it. But if they are driving you nuts, then just make a calculated decision. As long as you are doing the right thing with the rest of your credit accounts, then it will not hurt (long term) to close this one account out. Just give your score two or three months to raise back up before you apply for a new loan.

If you are making any of the common mistakes listed above, then wait to close the account until the balances on your other credit cards are lower.

You can read more about how your FICO score is calculated in our article “The FICO Score Breakdown.”

Thanks again for your question!

We also had another reader, Jose, send us this question:

Dear Sirs: I just triying to get a credit card because I close all my credit cards just because I enjoy a program to get down my my accs. So from now throuht the next 4 years I cant have credit, I am a person that I want to pay my bills on time, but I went in a situation that I have to enjoy this program, I am happy because from now they take action about my accs. But now I need A credit card because you need to have one to any emrgency,to rent a car,etc,etc,But I dont know where I can get one with my credit on the ground. Thank you, Sicerily; Jose Berrios.

Thanks for your question Jose!

You need a secured credit card. This means that you send in money (usually $200 - $300) to open up a credit account. You will eventually get the money back, but in the beginning it will be held in a savings account for you, and the credit card company will use it to pay your bill in the event that you do not pay as agreed.

Secured credit cards are wonderful things for people who are rebuilding their credit. They are not scams, you really do get your money back. Also, they will report your good monthly payments to all three credit bureaus and help you raise your credit score.

The alternative to a secured credit card is a “bad credit” credit card. These credit cards usually have high yearly fees, and you normally still have to send in $250 in fees (which you do not get back!) just to open up the account. In your situation, you will be far better off with a secured credit card.

For some more information on secured credit cards, you can read our article “How to tell if you need a secured credit card.” or check out our reviews of some of the best secured credit cards on the market.

Secured credit cards work just like normal credit cards except for the initial deposit. This means that you can use them to rent a car, or to set aside for an emergency just like a normal credit card. Truthfully though, it is always best to have an emergency fund at your bank for emergencies, and not just rely on a credit card. If something happened, you would have both things to fall back on, and you would not have to worry.

If you are not comfortable with a secured credit card, you could also consider a prepaid credit card.

Thanks for your question!

Have a question for us? Leave a comment below!

Keep Reading:

• What to Do If You Closed Out Too Many Credit Card Accounts
• How to Raise Your Credit Score In 7 Easy Steps
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We get a lot of questions here on Ask Mr Credit Card.com, and there have been some excellent ones on raising your credit score.

Most people want to know both “How can I raise my credit score?” and “How can I raise my credit score as fast as possible?”

So I thought we would take a look at some simple tricks that really do help you raise your credit score faster. The first one involves getting a CD at your bank, and then using that CD as collateral for a personal loan. This is completely legal, and it does raise your credit score.

Here are the basics, in case you want to try it for yourself:

Call or visit your local bank online to check their rates on CD’s. You may also want to consider various online banks because they sometimes offer higher rates on CD’s than brick and mortar banks do.

*Warning: If you normally do your banking with a credit union, then you will need to ask a manager whether or not the credit union will report the loan to all three credit bureaus. If they do not, then this strategy will not work for you - find a bank that will report your new loan to the credit bureaus instead.

Once you’ve settled on a bank and an interest rate for your CD, read the fine print. Most banks will specify whether or not the CD may be used as collateral for a bank loan. My bank, BB&T has that information on it’s main CD page:

Here’s the quick and simple checklist:

1) Find a bank that you are comfortable with
2) Make sure the bank will report a loan to the credit bureaus
3) Take out a CD
4) Wait about a month - Give the bank time to process the CD, and to get everything in order.
5) Walk into the bank and set up a loan using the CD as collateral.

You can click here to get a printable walkthrough that covers the entire process step by step.(Microsoft Word File)

Setting up your loan:

Applying for a secured loan (using a CD as collateral) will always get you a better interest rate on the loan than applying for an unsecured personal loan. This is especially important if you have a low credit score. Before you go into the bank to apply for a loan, there are a few things you will need to get together and take with you.

1. Copies of your pay stubs - make sure that you have at least the last month’s check stubs from your regular job. You may need to take in proof of up to six months of regular paychecks. If your check is directly deposited then print out your last few statements that show a record of the regular deposits.
2. Work up your monthly budget - You will be expected to prove that you will have the money to repay the loan each month. You will also need to be prepared to list your assets, and liabilities on the loan application.
3. Put your papers in order - Make sure you have your driver’s license, social security number, and any paperwork relating to your CD with you when you apply for the loan.
4. Call your bank beforehand - Do a quick check to make sure that your bank will not require you to bring anything else. You want to be as prepared as possible so that you don’t waste a trip, or have your FICO score pulled more than once because you weren’t prepared and had to apply for the loan twice.

What now?

Once you have secured a personal loan by using a CD as collateral, what then? The best thing you can do in this situation is to put the money from the loan into a savings account with the same bank. Do not spend it! Remember that you are just using the loan to raise your credit score, not to finance anything.

Your next step is to set up two auto-drafts to take care of making the payments on the loan. Schedule an automatic withdrawal from your savings account to your checking account, and a separate auto-withdrawal to make the loan payment out of your checking account. Make sure you have at least four days in between drafts so that your bank has time to process everything correctly.

This is very important! I know it’s annoying, and technical, but it puts the entire process on autopilot. You repay the loan, and you never have to think about it again. If you choose not to do this step, then at least mark a calendar each month when the loan payments are due.

What about the interest?

Because you are choosing to take out a secured loan, the interest rate will be lower than with an unsecured loan. You will still have to pay interest on the loan though. The interest that you pay on the personal loan is the cost of raising your credit score quickly.

It is actually cheaper to pay the interest on this loan than to pay the fees and interest on unsecured “bad credit” credit cards, and your credit score does benefit. I can tell you from personal experience that raising your credit score is not cheap. The lower your score is, the more it will cost you to raise it.

*Tip: You can offset some of the interest on the loan by putting the money the bank loans you into a high-interest savings account. That way, you will be earning interest on the money that you borrowed from the bank while you are paying the loan back.

Once the loan has been repaid, be sure to check your credit score. At this point, you can repeat the process and continue raising your score.

One final note:

Once your loan has been repaid you should draw up a letter stating that you made your payments on time, as agreed. Take it into your bank, and have your bank manager sign it. You can then take this letter with you when you apply for an auto loan, a home loan, or even another personal loan. Attach your bank statements to the letter, and highlight the sections that show regular payment on the loan. Keep it in a safe place, and next time you need a loan it will be ready to go!

You can click here for a sample letter that verifies you paid your personal loan on time and in full. (It’s at the bottom - Microsoft Word File)

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One of our readers, Marge, sent us this question:

I bought a house for an investment (paid $19,000 on a house that was appraised at $74,000) thinking I would fix it up and then resell it. I used a home equity loan (8%) and a credit card (14%) to buy the investment house, pay off some debt and fix up the house.

Since the housing market is horrible right now, I am just renting out the house until I can sell it. So, I have $40,000 debt on the home equity loan and about $20,000 debt on the credit card. I am not late on any payments, but called the credit card company to see if I could negotiate the interest rate.

I was told that interest rates are only renegotiated through the collection department and usually when accounts are past due. Do you have any suggestions? I was going to go back to the bank and up my home equity loan to pay off the credit card - but the way things are now I doubt the bank will do that.

Thanks,
Marge

Thanks for your questions Marge! I definitely think we can help here.

Step One:

Call your credit card company back. You are going to have to push to speak to either a manager, or a “customer retention” expert.

Basically, they can and will lower your interest rate, you’re just going to have to be very very persistent.

Try this tactic:

Tell your credit card company that you are going to balance transfer all, or part of the debt to someone else if they refuse to work with you. Why pay 14 percent if you can transfer a large chunk of the balance to a zero percent introductory rate credit card?

In no uncertain terms, just be firm. Remember to ask for a manager if the rep on the other end of the phone is not willing to work with you. Just keep asking, and you will usually be able to wrangle a better deal out of them.

Now, if they absolutely will not bend, then you just need to compare your options.

• Can you balance transfer part of the debt to a lower interest rate card?
• Would it be more beneficial to up your HELOC (Home equity line of credit) at the 8% interest rate?

It really wouldn’t hurt to check your FICO score before you begin negotiations. Everyone else is going to look at it anyway, you might as well know where you stand.

If your FICO score is over 725, then you will definitely want to try the credit cards first. If you could split the balance between a couple of balance transfer credit cards with low interest rates, that would be the best bet. Make sure you qualify for them first though. (That’s why I say check your credit score). Because if you don’t, then generating a bunch of credit inquiries is only going to lower your score, and would not be worth it in the long run.

So, to sum up:

1) Call your credit card company back, and do not hang up until you get a manager, or someone who can make the changes you need. Make sure they give you a permanent rate, not an introductory rate, if possible.
2) If that doesn’t work, try transferring part of the balance to a new low interest credit card.
3) If you need to take care of the remaining balance, then talk to your bank.

Now, if your credit score is borderline 700, then it would probably be best to just go straight to your bank first, for a couple of reasons:

• Credit scores around 700 may or may not qualify for the lowest interest balance transfers.
• If you don’t qualify for those balance transfers, then you will have lowered your score by applying, and you may not get the best deal at the bank either.

So check your credit score before anything else. If you are 725+, try the cards first. Lower than that, try the bank first.

Have a question for us? Leave a comment below!

Keep Reading:

• Editor’s Choice: The Best Balance Transfer Credit Cards
• Which Credit Cards Have The Lowest Interest Rates?
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One of our readers, Gene, had a couple of questions for us:

How do you start a repayment plan with a credit card company? and
I get a paycheck bi-weekly. can i split my credit card bill payment in half and pay them bi-weekly and will this help me pay them off quicker ?

Thank you for your questions Gene!

Let’s start with the first one:

How to start a repayment plan with your credit card company:

Normally, all you have to do is call your credit card company. If you are not currently past due, and you do not plan to be, then you really don’t need to make a payment arrangement.

If you call to make a payment arrangement when you are not past due, your credit card company will probably still tell you that you have to be past due or they can’t set it up.

Credit card repayment plans really only exist to help seriously past due accounts get back on track.

If you are past due with your credit cards, then be sure that you negotiate with the collections department. Collections reps can set up payment arrangements, remove any of the fees on your card, and possibly even reduce your interest rate. All you have to do is ask.

Now, let’s take a look at your other question:

Will paying your credit cards bi-weekly help you to pay them off faster?

There are a couple of issues with this. In theory, yes you will pay them off faster by sending in bi-weekly payments because you will essentially be sending in a couple of extra payments in a years time. (This is assuming that you are splitting the minimum payments up between two payments.)

However, that is not a good way to pay your balance off faster. Also, some credit card companies may not let you make less than the minimum payment - even if you plan to pay the other half later.

There is no hard and fast rule that you can only make a credit card payment once a month. You can make a payment every day if you want to - they’ll accept your money any time. Be sure that you aren’t getting charged “telephone” or “processing” fees though. If that’s the case you may just want to make one payment a month to avoid an additional fee.

So, the best situation would be to call and make a payment plan if necessary. Promise them only one payment a month (in case you find you need your money) and then make an extra payment with your next check.

As long as you are paying more than the minimum payment each month, then you will be getting your balance paid off faster. Just make it a habit to send in as much over the minimum payment amount as you can. Even if it’s only $25. Over time, it will add up.

If you have to make a payment arrangement, whatever you do, stick to the payment arrangement. Make sure you make at least the minimum payment on time as agreed each month, and then send in any extra money you have when you have it. Just don’t miss the payment you agreed to.

Thanks again for your question!

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One of our readers, Teresa, sent us this question:

I don’t have any delinquent cards. In fact, my credit score is about 680. I simply have too many credit cards and would like to pay them off before any trouble arises being the economy is what it is.

I would like to achieve a higher credit score, pay lower apr’s and reduce my monthly payments on those credit cards.

Can I reduce my apr’s by simply calling the creditor and asking them to lower my apr? If they refuse to; should I threaten to close the account? I ask about the threat process because that is usually when they take you serious and then pass you along to management with authority to negotiate.

I can follow through on account closure threat up to about $5,000. I have some accounts with 26.9% APR and a max credit line of $1,000. My highest major credit card line is $7,000 and the APR is 14.9%. My current balance is about $4,500. All the other cards are $1,000 less with higher APR’s.

I am willing to pay off up to $5,000 in debt on the higher interest cards but I would rather negotiate lower APR’s, get the payments reduced and then pay them off. Is that possible with the threat process? Where do I start? How should I professionally and seriously approach the creditor?

Thanks for your question Teresa!

You can absolutely call your credit card companies to have your APR lowered. There are a few key things to keep in mind when you do:

1) The better your payment history is, the better chance you have to get your APR lowered- If you have been a customer in good standing for a while, and you do not have a history of late payments, this this will be a pretty standard procedure.

2) You are probably going to have to talk to a manager, no matter what you do - General “customer service” representatives probably do not have the authority to do anything to help you.

3) Keep your cool, and be prepared to call back multiple times if necessary - If you get an unhelpful rep, don’t be rude. Just ask to speak with a manager. If the manager does not help you, then don’t be afraid to hang up, and call back a little later to speak with someone else. Don’t let a rude rep, or a manager who is having a bad day keep you from saving money. After all, this is your money we are talking about not theirs, so you are obviously going to care more about the situation than they do. Be friendly, professional and above all, persistent until you can come to an agreement.

Now, about threatening to close the account. I would not do this unless you have no other recourse. The problem here is that if you close out the account you will be stuck with the high interest rate, and no account. The best thing to do here is to tell them that you have several attractive balance transfer offers (whether you do or not.)

From the bank’s perspective: Whether or not you close the account, they get to collect your balance and your interest. However, if you balance transfer they lose your debt and all the interest that they would have been able to charge you. So the best thing to do is not threaten to close the account, but threaten to transfer the balance.

Also, you do not have to accept the first rate reduction that they offer you. At first, they might be willing to knock off two to five points. Be prepared to negotiate further. Keep telling them about your good payment history, how happy you have been with the company, and how you really hate to have to transfer the balance, but if they can’t work with you a little more then that is what you are going to have to do.

The best thing that you can have happen is to be transfered to an account manager, or to someone in their retention department. Just be calm, polite and keep negotiating until you get the best rate they can offer you.

Also, you need to be very sure that when they lower your APR that it is a permanent change, not an “introductory rate”.

You can also ask them to simply move you to a new account with a better interest rate. In other words, see if they can upgrade your card completely.

I cannot stress enough that just being firm, and keeping your cool will win out. Since you have some cash on hand, you can also offer to pay your balance in full on a couple of these cards - especially if they are willing to upgrade you to a new card with better terms.

Also, be sure that you get your last statement together before you call them since it will reflect your most current information.

As a final note, if you are trying to raise your credit score, then do not close out any of your accounts unless you absolutely have to. It will be a very bad thing because it will lower the average age of your accounts, and increase your debt to credit ratio. If you have to you have to, but it would be best for your credit score to leave them open.

Hope this helps, good luck in your negotiations!

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One of our readers, Jennifer, sent us this question:

I have a cc from 10 years ago that my late ex husband opened in my name and charged it up and now the cc company has said that they were gonna take $600 a month out of my check until the card is paid off. Is this correct?

Hi Jennifer, thanks for your question!

Here’s the deal:

The credit card company cannot take any money out of your check unless you specifically authorize them to, and then it would still not normally be removed from your check. Usually a payment arrangement would come out of your bank account at regular intervals that you agree on. If you haven’t agreed to it, then no money can come out.

One exception:

If you have a judgment against you for the debt, then yes, they can legally garnish your wages. If you have a judgment, then you should have been notified of it. If you have moved several times, and are not sure whether or not you have a judgment against you, then you need to check your credit reports at all three credit bureaus. It will be listed there as a public record.

Now the thing that bothers me about this is that the debt is ten years old. Usually by this time, the statue of limitations has expired. So, let’s take a better look at that.

What is the statue of limitations?

The statue of limitations is the legal amount of time that creditors are allowed to attempt to collect a debt from you. Usually the statue of limitations is between 4 and 6 years, but the laws vary by state.

Problems with the statue of limitations:

If you speak to a creditor about your debt, set up a payment plan, promise to pay the debt, or even call to inquire about it, then you effectively reset the statue of limitations. This means that if the laws in your state say that they have four years to collect from you, and a collection company calls you and speaks to you about the debt at three years and eleven months, then the statue of limitations is reset for another four years.

So, if you have not spoken to anyone about the debt then you should be protected under the statue of limitations. If you have spoken to them however (and it sounds like you have) then this will probably not apply to you.

Now, there’s another issue here. You said that your ex-husband opened up an account in your name, and then charged the account up. If this is the case, and you are being sued for the debt, then you are either going to have to treat the debt as identity theft (meaning that he did not have your permission to open the account) and possibly attempt to prosecute him for it, or you are going to have to find a way to pay the debt back.

Regardless, this is a very old debt, and the collections agency cannot garnish your wages without a judgment. So, the first step for you right now is to pull your credit reports and see if you have a judgment against you. You can request a free copy of all three of your credit reports here.

If you do not have a judgment against you, then rest assured that they cannot take any money out of your check without your permission.

Thanks again for your question.

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Universal default clauses are one of the sneakier ways that credit card companies can pick your pockets. The best thing you can do is to understand exactly what this policy is, and what it could mean to you.

What is universal default?

A “Universal Default Policy” is a clause that is found in some credit card agreements. Basically it means that if you pay late, or default with any of your lenders, then your credit card company can permanently raise your interest rates - even if you have never been past due with them.

Here’s an example:

Sue lost her job, and while she was looking for another, she missed a few payments on one of her credit cards. Once she had a new job, she worked out the balance, and paid her bill. The next month she was shocked to find that her interest rates had gone up - not just on the account she missed payments with, but on her other credit card accounts too.

What happened? When Sue missed payments on one of her credit cards, her other lenders took the opportunity to put their universal default rights into play, and they raised her interest rates- despite the fact that her missed payments were with a completely different creditor.

You also need to know that missed or late payments on auto loans, mortgages, personal loans, or any other type of loan can be considered grounds for raising the interest rates of your credit cards via the universal default policies.

So, how much can my credit card company raise my interest rates if I’m late with someone else?

If your interest rates are raised because of a universal default policy, then they will be raised to the “default” rate that was given to you when you first signed up for your credit card. It will have been listed in your terms and conditions. Usually it is listed as the rate your account will default to if you miss X number of payments.

For example:

You may have a 9% interest rate regularly, but if you miss a few payments, your interest rate will default to 24% interest.

If you credit card company chooses to raise your rates via universal default, then you will automatically be charged 24% interest form that point on.

Each credit card policy is different, and some credit cards do not have universal default policies. You will have to look at the terms and conditions for your individual cards to see whether or not they have a universal default policy, and how much interest you are likely to be charged.

What can you do if your credit card company raises your interest rates because of it’s universal default policy?

Slightly less than 50% of credit card companies use universal default policies. Each year there is new legislation proposed to outlaw, or limit the negative impact that this clause has on consumers.
Despite those efforts universal default policies are still in effect.

So, if you find yourself in this position, then the best thing you can do is to pay the balance on the card off immediately. You can also consider transferring the balance of the affected card to a different card with a better interest rate.

It never hurts to contact your credit card company, and ask them to reduce your interest rates back to where they were before the increase. Not all companies will be willing to do this, but you will never know unless you ask.

Always remember to read the fine print carefully before you sign up for a new credit card. In particular, look for cards which do not contain universal default policies.

The following information comes from the Consumer Action 2008 Credit Card Survey. Below you will find a list of banks which do not currently use universal default policies. However, I cannot stress enough that you are still going to have to check your individual agreement with your credit card company.

Most of these banks have used universal default policies in the past, and depending on your agreement with them, it could still be in effect.

Also, check the terms and conditions carefully before signing on with a new credit card company - even if they are on this list. For the full results of the 2008 Credit Card Survey you can click here.

Credit Card Companies not currently using universal default policies:

• Citi Cards (They were not included on the survey list, but they have a public policy which states that they do not use universal default. )
• American Express
• Bank of America - (see comments)
• Capital One
• Wells Fargo

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One of our readers, CB, sent us this question:

I have a couple of credit cards that I have been 30 days past due on. This is just because I’m a little tight strap for cash right now. One of my options is to enter a prepayment plan with the credit card company, I am willing to do it but will this hurt my credit score? What effect that this have on my credit history? Please advise.

Hi CB, thanks for your question!

Creating a prepayment plan with your credit card company will not hurt your credit score at all. In fact, it’s the very best thing you can do in this situation. Just make sure that you stand by whatever agreement you make with them - to the letter. I say this because if you do not pay as agreed you can expect, at a minimum, to have your interest rates on the card raised, as well as incur additional penalties and fees. Your credit card company could also close your account.

The only things that show up on your credit score as far as your credit cards are concerned, are your limit, your available balance, and whether or not you pay late, or on time.

As long as you keep to the agreement, and keep making your payments on time, then your credit card company will not report you as being late, and your credit score will not suffer.

If you want to check and see how recent late payments may have affected your credit score then you can always use the recent TransUnion Class Action Settlement to take advantage of some free credit monitoring.

Just know that making a payment arrangement with your credit card company is the best thing you can do to protect your credit score right now.

Thanks again for your question!

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One of our readers, Sharon, sent us this question:

I am considering credit counseling services. Someone told me if I decided to go through with the program, it could impact my credit - making it worse than bankruptcy. Is this true? I’m having a hard time believing it is, but I’d like to get another opinion. Thanks

Dear Sharon,

Thanks for your question! There is not really a simple answer to this question, because it depends on the credit counseling service that you use. Just using a credit counseling service by itself will not hurt your credit score. Meaning that when you go, and sign up to have them help you manage your debt repayment, it will not show up on your credit score.

However, many credit counseling services can definitely damage your credit score as they attempt to negotiate your debt.

Here are the facts:

When I worked in collections for Providian Financial, we were allowed to negotiate settlements, balance reductions, remove interest, late fees, and over the limit charges. The normal customer service reps were not allowed to do this though.

What that means is that you usually have to be past due, and sometimes seriously past due on your credit cards to get many of these benefits. Credit counseling agencies know this, and it is a pretty common practice for them to hold the money you give them until you are seriously past due, and then negotiate a deal with your credit card companies.

So, yes, doing things that way will definitely hurt your credit score - sometimes more than a bankruptcy does. A bankruptcy is one incident as far as your credit score goes, and it is followed by an immediate reduction in what you owe. So while yes, bankruptcy hurts your credit score, months and months of late payments on several accounts can actually hurt it more.

Before you go to a credit counseling service, it never hurts to get all of your paperwork together, and contact the companies that you owe money to. Tell them you are considering credit counseling, or possibly bankruptcy. Ask them what they can do to help you.

All credit card companies have a policy for removing late fees, over the limit fees, accepting settlements, etc. If you take the time to find out what the policy is, and ask them to remove those fees, then you can probably handle the issue without a counseling service.

However, if you have a lot of accounts that have already been sold to collection companies, then you are probably better off just going to a credit counselor. They have a lot of experience in negotiating settlements with collection companies, and it will save you a lot of time and headaches.

Just be sure that whatever counseling agency you choose, that you understand their policy on debt repayment. Ask them if they plan to hold your money, and for how long? The last thing you need is to have months and months of bad marks going on your credit report while you are trying to do the right thing and resolve your debt.

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Keep Reading:

• Due Diligence When Choosing a Consumer Credit Counseling Service
• What to Do When Your Credit Card Debt Has Been Charged Off
• How to Tell if a Credit Counseling Service is Legit

We have a family member who constantly lies to her husband about her credit cards.

He thinks they have a great credit rating because he occasionally takes out “Six months same as cash” deals on furniture or electronics.

I know that they have a great credit rating because she has six credit cards that she’s had for years, and always makes the payments on time.

I dread the conversations where he advises me “All you have to do is take out a few six months same as cash loans, and then pay them off - it worked for us!” Inwardly I groan. We’re repairing our credit after bankruptcy, which is a serious ordeal. I don’t think a few six-months-same-as-cash loans (which we qualify for in our dreams) is going to fix anything for us.

So, I grit my teeth and cry a little inside. Not just because I know better, but because realizing their true situation makes me a party to the lie…

Yes, paying off those loans probably helped them, but it’s the wheeling and dealing going on behind his back that makes up most of their score. So I was thinking about it, and I wondered, “Is this normal?”

I mean, in our pre-bankruptcy days, I’ll admit that I occasionally made purchases and did not inform my spouse of the amount, but I was the one that handled the money.

So, does my family member who’s hiding her cards feel the same way? She handles the money, so there’s no harm done?

After we declared bankruptcy my husband and I made a promise to be honest with each other, and to both try to handle the money together so that we really could have a fresh start.

So far, I’ve kept my promise. I don’t put much money on my credit cards, but when I do, my husband knows about it. I don’t give him the amount to the penny, but I do say “It was about $60” or whatever.

I think this policy has actually helped our marriage, and we have better control over our money than ever before. I can’t help but wonder though, are we the exception? Are you honest with your significant other about your debt? What about when you first met?

After I spent some time thinking about this, I surfed around a little online, to see what I could find. I came up with a few excellent articles that I wanted to share with you - in case you were interested too:

• Do you keep secrets from your spouse? - BeingFrugal.net
• Lies, money and marriage - what can you do? - Gather Little by Little
• Financial Infidelity is Rampant - MSN Money / Liz Pulliam Weston

So, how about you? Have you ever told a “white lie” to your spouse about money? Do you know of family members who lie to each other about credit card debt? Are you ever caught in the middle? Tell us about it in the comments section below - It’s fine to be anonymous.

Did you like this article? You can get our future articles for free! (Click here)

Keep Reading:

• What we can learn from Spitzer, Kristen and Emperor’s Club?
• How Many Credit Cards Should You Have?
• 10 Reasons Why I Love My Credit Cards

Photo Credit: CommittedMarriage.com