Consumer Rights
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Credit and Credit Cards
When you turn 18, it will seem as if you suddenly become very popular with credit card companies. You will probably receive two or three forms in the mail asking you to apply for a credit card. These credit cards may be from local department stores, general credit companies (such as Visa and MasterCard), or from oil companies.

Although it is very exciting to receive these cards, you need to remember that they can easily get out of control. When you purchase something with a credit card, you must repay the credit card company. Unless you pay the credit card company within the grace period, you will usually have to pay interest. It is unfortunate, but many young adults owe thousands of dollars to credit card companies. If you receive a credit card and decide to use it, read the terms of the agreement very carefully. Different credit cards have different interest rates, which can make a considerable difference on your bill. Most companies will allow you to pay a minimum balance each month. These minimum balance payments are usually quite low. A combination of both low minimum balance payments and large interest payments could mean that a $100.00 item ends up costing you $150.00.

If you lose your credit card, you should immediately notify the credit card company. Additionally, you should never release your credit card number over the telephone unless you are sure that you are working with a reputable company.

Credit Ratings
A credit rating is a tool used to determine whether or not you have a history of promptly paying your bills. Credit bureaus are located throughout the state that accumulate credit information about you from people such as landlords, banks, credit unions, etc. If you make an arrangement with a credit card company to make payments on or before the 15th of each month and you skip a payment, chances are high that this missed payment will be reported to the credit bureau. The credit bureau will then apply this information to your credit rating for future reference.

If you are denied credit based upon your credit rating, it is required by law that you be sent a letter explaining why your credit was denied. The letter will also contain information advising you how to get a copy of your credit rating. You have the right to obtain your credit rating and challenge information that is on it.

A good credit rating is very important and should be taken very seriously. The best way to protect your credit rating is to make sure that you do not acquire excessive debt and that your payments are always on time.

Bad Debts
Many people make the mistake of living a "buy now - pay later" way of life. When they reach the maximum amount allowed on their credit cards and can no longer obtain loans from their bank, they are often on the brink of financial disaster. Careful money management will help you avoid this type of situation. However, if you do accrue multiple bad debts, there is help available.

Throughout the state of Iowa, there are organizations which offer professional money management advice and help you consolidate your debts to avoid bankruptcy. These services are usually offered for a very small fee or they may be entirely free. Agencies that provide this type of service are usually listed in the yellow pages under "Credit and Debt Counseling."

Bankruptcy is a proceeding under federal law by which a person may be released from paying his or her debts or can arrange for regular payments so that creditors are repaid. Any person can file for bankruptcy. It is not necessary for your debts to be greater than your assets to file bankruptcy.

Bankruptcy petitions are filed with the Clerk of the United States Bankruptcy Court. The clerk of court charges a filing fee to file a bankruptcy petition. If you file a petition in bankruptcy, most lawsuits and garnishments are automatically stopped. Your creditors have the right to ask you questions about your assets when you file a bankruptcy. A trustee will be appointed to evaluate your situation and pay your creditors.

Bankruptcy is a very serious matter that will affect your credit rating for the rest of your life. Your attorney should be consulted prior to the initiation of a bankruptcy.

It is a good idea to develop a relationship with a bank as soon as possible. This may be accomplished by opening a checking and/or savings account. Prior to opening an account, you should examine what each bank has to offer. Some banks offer free checking accounts while others require a minimum balance. Some banks may also offer you an ATM (Automatic Teller Machine) card along with your checking account.

Checking accounts are helpful when you are unable to pay for purchases in cash. When you sign a check, you are stating that you have that amount of money in your bank account. If you write a check for more money than you have in your bank account, you are committing a crime. Therefore, it is very important to keep track of the amount of each check and the amount in your account to avoid problems.