Alcohol Consumption Puts College Students in Credit Card Debt

beer moneyAccording to the Trends in College Pricing 2010 report compiled by The College Board, the average estimated undergraduate budget❠for a   student during the 2010-2011 academic year is $20,339 for a four-year public school and $40,476 for a four-year private school. These numbers factor in tuition and fees, room and board, books and supplies, transportation and miscellaneous expenses. But do those numbers include the $500 a year that Rachel Barrington of the University of Wisconsin claims the average college student squanders on alcohol?

Gayla Martindale’s estimate in her article, A Look at the Spending Habits of College Students, posted on the blog is somewhat jaw-dropping: Each year, American college students spend $5.5 billion on alcohol.❠That’s a lot of money to be pouring down the hatch, especially in light of the fact that most students enter the workforce after having earned their post-secondary degree, carrying debt that they accrued along the way.

So how is the average, financially-strapped college kid affording all of this booze?

Some students spend using credit cards. In fact, most students â“ some 75% of females and about 70% of males â“ have 1-3 credit cards. The cost of teenage alcoholism is high, from the expenses they incur during their drinking sprees to the toll it takes on their health.  Plastic is used by many to charge school necessities such as books, supplies, and even tuition. Credit cards are relied upon by students for discretionary spending as well. While it can be advantageous for a student to begin building his or her credit score while still in school, the risk is that the temptation is there to fund fun nights of drinking with friends while sinking into a pit of debt.

According to a 2009 article published by Sallie Mae, entitled How Undergraduate Students Use Credit Cards, Undergraduates are carrying record-high credit card balances. The average (mean) balance grew to $3,173, the highest in the years the study has been conducted. Median debt grew from 2004’s $946 to $1,645. Twenty-one percent of undergraduates had balances of between $3,000 and $7,000, also up from the last study.â

At California State University Fullerton, workers in their administration office claimed that their institution sees more students discontinue their education due to credit card debt more often than due to academic failure these days.

The National Association of Scholars (NAS) uncovered in a 2009 article that A recent survey of more than 30,000 first year students revealed that nearly half were spending more hours drinking than they were studying.â

That means many college undergrads are opting to drink away dollars that would better serve them by being put towards school-related expenses. In turn, perhaps less drinking would result in fewer students dropping out due to their insurmountable debt.

If it’s true that, as Caralee Adams reports in her article Lack of College-Educated Workers Will Hurt Economy, Americans that have graduated college with a bachelor’s degree earn an annual salary that is an average of 74% higher than those earned by workers with only a high school diploma. Students who focus on overdrinking during college, rather than studying, may be doing much more than merely drinking away time and money that could otherwise have been better spent. They could very well be drinking away their future earning power.

photo by greencolander

Is Free Score Any Good?

free score

There’s been talk recently about a new credit score company, called Free Score.  You might recognize their name because most of their commercials have Ben Stein in them, gotta love the guy! Anyways, Free Score is a company that provides “free” credit scores through the three big chain reporting agencies: Equifax, Experian, and TransUnion.

Looks like the navigation around their site is simple and straight forward.  With big buttons, it’s obvious where you should navigate.  A cool thing they do is provide you with a sample report before you  commit  to using their service.

Since I check my credit score on a regular basis, I didn’t find a use for registering through Free Score.  In fact, I don’t believe Free Score is free at all.  The free credit score they offer comes with some weight attached.  That is one of the drawbacks of using them.  I found some fine print that you should know about.  Here’s the first piece you need to know about:

“ is not affiliated with the annual free credit report program. Under a new Federal law, you have the right to receive a copy of your credit report once every 12 months from each of the three nationwide consumer reporting companies. To request your free annual report under law, you must go to”  

This basically means that since Free Score is not allifiated with Annual Credit Report, you have to pay to use their service.  This is why their name is kind of tricky.  At least they tell you about on their website and how to get your free credit score. There is more fineprint about how Free Score works in terms of payment and use:

“FreeScore  provides you with the tools you need to access and monitor your financial/credit information through the program’s credit reporting and monitoring benefits.  FreeScore  and its benefit providers are not credit repair service providers and do not receive fees for such services, nor are they credit clinics, credit repair or credit services organizations or businesses, as defined by federal and state law. Credit information provided by TransUnion Interactive, Inc.”

In other words, Free Score is run by TransUnion.  Basically, what Free Score does is provide credit monitoring for a monthly fee.  Another important thing to point out is that Free Score doesn’t provide services if your credit score does get hacked or ruined by identity theft.  It’s simply a monitoring tool.

So, if one did want to see their credit score through Free Score, you actually have to hunt down the pricing on the official registration page.  You can check out the pricing and details on the right side of the registration page in small font.  Here is what it says:

“Simply click “View Scores” on the next page to activate your  FreeScoretrial membership and claim your 3-in-1 Credit Profile and Triple Credit Score. After your 7-day FREE trial period it’s just $19.95 per month forFreeScore. Remember, you can call  FreeScore  toll-free at 1-800-316-8824 within the first 7 days to cancel, and you will not be charged/debited.”

What this tells us is that it’s a membership signup, not a one time deal.  By signing up with Free Score, you are automatically enrolled in a 7 day trial where you can check out your credit score at any time. Once the trial is up, you are automatically enrolled in their monthly membership package of $19.95/month.  So, if you do use Free Score, you will want to make sure you cancel within the 7 day trial period to ensure that you don’t get billed for something you don’t want.

Free score is similar to Free Credit Report, in that they both offer something for free, but in reality, both are membership sites that cost money on a monthly basis.  It’s kind of shady how they market their site and services, so it’s up to you whether or not to take the plunge.

So, should you use Free Score?  Like everything in life, it’s up to you.  If you want to get a free score, sure go for it.  But if you don’t want to incur a monthly fee for monitoring services, then no, it’s not for you and you should look elsewhere.  Whether you use Free Score or not, you should always read the fine print, I just did the work for you on this company 😉

To the readers, has anyone used Free Score recently?  What are thoughts on their credit monitoring services?

Credit Card Secrets That Every Small Business Owner Needs to Know

credit card

So which do you want first, the good news or the bad? Let’s just go ahead and get the bad out of the way. Unfortunately, business credit cards were not included within the scope of the new credit card law (the CARD Act) and as such do not enjoy many of the protections it provides, perhaps most notably that which prevents an issuer from changing the interest rate on your existing balance for any reason they want.

What’s more, if you have a so-called business credit card, the odds are that you’re individually liable for its use and that information about such use is being sent to your personal credit reports, according to a study by Card Hub.

Not only are you therefore at risk of an unexpected cost-of debt increase whenever you carry a balance on a business credit card,❠but any consequences arising from this debt also extend into your personal life. Ok, there, we ripped the Band-Aid off.


So what’s the good news?

The good news is there are ways to limit your personal risk while improving the performance of your business. So let’s get into them.

Option 1: You can simply use a Bank of America business credit card. While this might sound odd to you given the aforementioned bad news, a few credit card companies have voluntarily applied certain aspects of the CARD Act to their business credit cards. Bank of America is currently the only one to apply every major CARD Act protection to its line of business-oriented cards, which means even if you carry a balance on a BofA-issued business credit card, you’ll have debt stability. You will unfortunately still be personally liable for use of this card and usage information will still be relayed to your major credit reports, but according to Card Hub’s study, this is likely the case no matter which issuer you use.

Option 2: Why not simply use a 0% APR consumer credit card for any business purchases that will lead to an end-of-month balance and your business credit card of choice for those that will be paid for in full? There’s no rule against using personal credit cards for business purposes, and this strategy will give you both protection under the CARD Act and the unique business utilities that business credit cards provide, including the ability to manage and track business purchases as well as give cards with customizable limits to employees and earn rewards on their spending.

Final Thoughts

In truth, so-called business credit cards should be included within the scope of the CARD Act. This law pertains to consumer credit cards, and as Card Hub’s study obviously illustrates, business credit cards❠are consumer credit cards at heart. The bottom line is that branding seems to be the main reason they aren’t. This in itself is another piece of good news because such an oversight will inevitably be remedied and every small business credit card will enjoy the protections that have increased transparency throughout the consumer credit card market. Until that time comes, simply employ one of the strategies laid out above, and both you and your business will benefit.

(By Odysseas Papadimitriou, CEO of Card Hub. Card Hub is a leading online marketplace for credit card deals and gift cards.)

Online Help With Credit Card Debt

Customers in the USA are still very much global leaders in terms of credit card debt. And yet, they have started to considerably restrict the use of their Visa-, Amex- and Master-cards: The number of people making late payments recently hit a 17-year low, according to credit reporting agency TransUnion. In contrast, the UK sadly seems to be catching up. In the first quarter of this year, building societies and banks wrote off £1.89bn, of which a towering £866m consisted of credit card debt. No wonder, then, that all across the country, schemes aimed at providing credit card debt help, both online and offline, have proliferated: Celebrity expert Dave Ramsey is offering courses teaching participants how to deal with credit card debt. Barclay’s have introduced a credit card which promises âžbreathing space for your finances and help with your shopping. And there are even âžonline credit card debt help tools to facilitate keeping track of just how much money you still owe. Need any more proof that credit card debt has long turned into a serious issue, which could affect you, too, in the not too distant future?

Online help for credit card debt

Fortunately, online help for credit card debt is readily available. Today, cornucopias of companies have sprung up to offer advice and assistance. Most of them seem to suggest that credit card debt is substantially different from any other kind of debt. This, however, is only partially true. The biggest convenience and at once the biggest inbuilt danger of credit cards is their ease of use. Credits cards allow you to go on a wild online shopping spree, pay for your clothes at expensive fashion stores without having to put any money on the counter and to make purchases which would otherwise seem outlandish by allowing you to borrow from them without any kind of palpable restrictions. Of course, these comforts are bought at an expensive price: Loosing track of your finances and considering money a resource which can infinitely be replenished. In reality, however, by using a credit card, you’re not just buying more than you can afford and piling up debt. You will also have to pay interest on this debt, which will accumulate even more and add up to vertiginous sums over time.

Steps against credit card debt

And yet, these facts do not make credit card debt inherently different from any other kind of debt. It can still be broken down to two fundamental issues:   Wrong spending patterns and a discrepancy between your income and spending. Which is why a good debt management company will be able to offer you a wide range of services aimed at resolving your personal credit card debt problems. Apart from bankruptcy, these include help in adjusting your spending habits, debt management plans, individual voluntary arrangements, debt relief orders and plenty more. In many cases, the first step towards credit debt help can be taken free of charge and by filling out an easy online form. To prepare for this, you should try to arrive at a meaningful estimate of your credit card debt and how precisely it is distributed across different credit cards. Depending on these facts, the company will then be able to suggest practical measures and concrete help.

Ultimately, when it comes to choosing the right provider for professional credit card debt help, you should apply the same criteria as for any other kind of debt. The Debt Advisory Line, for example, have already helped thousands who thought bankruptcy was their only option.

Credit Sesame Free Credit Score Review

Don’t you hate those supposedly “free” credit report companies trying to reel you in to buy other services?  Do you just want the down and dirty about your credit report?  I just want my credit report number and move on with my life.  In all of my searching, only one company does this completely free and hassle free.

Credit Sesame to the rescue!  It really is the best way to get your credit score.

Tell me more…

Want your credit report in less than five minutes without the use of a credit card?  Well, Credit Sesame does just that.  No worries, they won’t be asking you for any crazy applications to be filled out or your credit card info.  They make zero money off of providing you with your credit report.  That’s why I like Credit Sesame.  They are an honest organization that truly have a mission of saving you money.  They actually make their money my recommending various banks or lower interest loans.  It’s a win-win. You save money and Credit Sesame stays in business.  Sounds goo eh?

Getting to know the dashboard inside Credit Sesame

All it takes is a couple minutes for the  initial setup.  To find out what your credit score is, all you have to do is a simple mouse click.  Thankfully, Credit Sesame only performs “softpulls” of your credit report.  You avoid credit score dings with this feature.  Another reason why Credit Sesame is the best.  Credit Sesame focuses on your large loans like mortgages.  It uses a website called  I don;t have a mortgage so I’m not sure how effective this tool is.  However I’ve read that it’s very accurate.

More than just a free credit report

Credit Sesame is a lot more than just another credit reporting company.  They focus on  finding lower interest rate loans to  replace  your current loans.  Here are some other things Credit Sesame can do for you for free!

  • Goal planning functionality to help you reach long term horizon goals. You can compare future savings and make decisions on estimated numbers.
  • Save thousands on your home mortgage. Credit Sesame has an awesome feature where they recommend the best financing across the nation so you know you’re not being left out of potential savings.
  • Consolidate your debt. It’s nice to know Credit Sesame is constantly looking out for ways to consolidate your debt and get your debts paid off faster.  After all, they have incentive to help you since they get a commission with their tier companies.
  • Debt management. You can check out outstanding debts in one place.  This is amazing for people who don;t want to use multiple websites.  Definitely a “win” in my book.

What about Credit Sesame’s security?

I know there will some of you who are hesitant about giving your social security number away.  If you use online banking or websites like, this no more dangerous. The encryption  technology  is extremely sophisticated these days.  Credit Sesame is a  trustworthy  company and sure to be around for years to come.  You can manually input your SS number if you are truly paranoid about it.  It’s up to you.  But, rest easy. Credit Sesame’s security on the site is top notch.

So, what was my credit score?!

In the quest for  transparency  on Free Money Wisdom, I will tell you my credit score according to Credit Sesame: a 740! It’s pretty good but I was hoping it would be higher. I think it’s on the lower end because I churn and burn credit cards for their bonus programs.

So, now that you have access to Credit Sesame, what’s your credit score?! It’s free, so why not check it out!  Comment below with your  experience  and let us know your credit score, I dare you!

How to Rebuild Your Credit

Making mistakes is a part of being human, and money and finance are no exceptions. Problems with money and debt are not limited to class or race. Everyone makes mistakes and occasionally ruins their credit. Employers and landlords using credit checks to discriminate between applicants are part of a growing trend. This is unfortunate for people trying to rebuild credit. Rebuilding your credit is not only possible but probable. The steps you have to take are simple. However, they require diligence and dedication to work.

Clean Up Your Credit Report

Nothing stays on your credit report forever. Even bankruptcies disappear after 7 or 10 years, depending on the type of chapter the debtor files. Get a copy of your credit report and look for errors and incorrect information. Contact the credit bureau, preferably by letter. Inform them of the errors in extreme detail. The credit bureau will probably provide a form that you can fill out, so writing the letter may not be necessary.

After providing the bureau with notification of all the incorrect information, the bureau is required by law to investigate each of them and report back to you within 30 days. Should the credit bureau determine that you are in the right, or that the original creditor cannot verify the information, the bureau must correct the report. This may entail removing the information or modifying it.

On the other hand, if the bureau replies and says the information is correct, discuss the problem directly with the bureau. If that doesn’t go anywhere, try contacting your creditors and ask them to modify or remove the information. Creditors are legally prohibited from knowingly reporting information that conflicts with information in their possession, or from knowingly reporting incorrect information after they learn it is incorrect.

Use Credit To Rebuild Credit

This saying is true. The best way to rebuild credit is to open new credit card accounts and use them responsibly. Since unsecured credit is likely unavailable at this point, start over by using secured credit. A secured credit card is your best bet to rebuild your credit rating.

When you open an account, you are required to deposit a sum of cash with the credit card company. This sum becomes your credit limit. If you default, the credit card company can seize the deposit. Some secured credit card companies rely on underhanded tactics to essentially extort money from their customers. Do your homework and find a company offering credit cards that is customer-friendly.

Rebuild with Secured Credit

Secured credit cards help get you to the point where you will start getting offers of unsecured credit once more. You may find it beneficial to continue using secured credit cards for the foreseeable future. Keep in mind that creditors are likely to rate you as “subprime.” Consequently, the interest rate on your card will be higher. As you build up a history of using credit wisely, your credit rating will eventually rise. The keys are responsibility and stability. Creditors like knowing you are accountable and trustworthy.  Another method of protection is term life insurance quotes.  You should always cover your bases and the rest will cover itself!

(Richard Towler has a background in finance and economics which led him to create a network of consumer finance comparison websites including Secured Credit Cards 4U in the USA and Australia to help consumers find the right credit cards for their needs.)


Tips to Improve Your Credit Score

If you want to apply for a low APR credit card, but have been rejected in the past, you may want to improve your credit score. Fortunately, this is often easier than it sounds.

First, you should ensure you check your credit files regularly. It costs just £2 to see your credit file, which is the basis for many decisions by banks and credit card companies.

Make sure you check every detail carefully. If there are any errors, ensure that you correct them by contacting the credit agency. Even if the agency refuses to change the details, you can add your own notice of correction to you file.

Ensuring that you credit file is correct and up to date can help to improve your credit file.  Ensure that you get your credit score free when analyzing your results.

You should also ensure that you are registered on the electoral role, as this will help boost your credit score. Other simple ways to boost your score, and improve your chances when applying for a low APR credit card, include having a land line telephone installed, cancelling old, unused accounts and ensuring that repayments are made in time.

These will all make you more attractive to credit card companies and other lenders.

You should also space out any applications for credit. If there are a lot of applications at once, which all require checking your credit score, this can hurt your score. Instead, wait a few months after applying for a car loan before you apply for a 0% balance transfer credit card or a mortgage.

However, you may still be rejected even if you have a healthy credit score, if the lender does not think they will make a profit from you. For example, if you always switch to 0% balance transfer credit cards to avoid paying interest, the credit   card company won’t make any money.

After all, credit cards companies, even if they offer low APR credit cards, still want to make a profit.