What is my FICO Score?

Your FICO Score is a number, in the range of 300-850, that represents how risky it would be for someone to loan you money. It is calculated based on data from a credit report about you.

Why should I care?

The way you use credit now will dramatically influence the amount it will cost you to borrow money later. The images below are from MyFICO.com, which is run by the company that calculates your FICO Score.

Continue reading Your FICO Score »

Paying for a purchase with a credit card has benefits beyond those discussed in my post on credit scoring. Be aware that these benefits may not apply to a purchase made with a debit card, even if the debit card is used as a credit card at the point of sale.

If you notify your card issuer within a certain time frame, federal law (15 USC 1601) limits your liability for unauthorized charges to your credit card to $50. In practice, Visa and MasterCard both waive the $50 liability. Unfortunately, card issuers do not bear the costs of any unauthorized purchases. Merchants who process transactions that are later discovered to be fraudulent almost always bear the costs, regardless of whether they were aware of the fraud.

Continue reading Extra benefits of paying with a credit card »

I’d like to share my experience regarding an incident in which Verizon debited my checking account for $151.47 more than was actually owed, refused to promptly return the money, and refused to offer compensation. I would also like to share my experience with Verizon’s door to door sales representative Jonathan Bing.

Continue reading My experience with Verizon FIOS billing and sales »

I’ve maintained a credit card account with Citbank since they bought the company that issued my first credit card in 2000. Recently, Citibank raised my interest rate from 6.99% to 14.99% with no negative change in my risk profile (FICO score, employment status, income). When I spoke with several of my friends, they informed me that Citibank raised their interest rates as well. I called Citibank’s customer service and was told that they would not drop the rate. I followed up with a letter expressing my displeasure. Citibank responded with what appears to me to be a form letter.

Continue reading Citibank interest rate increase »

Why do stores offer discounts?

When a store offers you a discount, they are hoping that it will entice you to spend more money. The store may be betting that a discount on a particular product will make you more likely to buy that product. Alternatively, the store my be betting that offering to sell you one product at a discount will entice you to buy other products. When a store mails you a discount offer near your birthday, they are betting that the discount will entice you to visit the store and buy something.

Wow, you managed to state the obvious.

Before you stop reading, consider that a substantial percentage of shoppers still fall for the trick. Stores don’t offer you discounts because they like you and want to save you money. That little green lizard isn’t really trying to save you money on car insurance. He’s trying to get you to buy car insurance from Geico. I have Geico car insurance because it actually is cheaper for me. I learned that by comparing the rates offered to me by a half dozen companies, not by listening to an animated lizard.

Continue reading Save money. Pay full price. »