I’m all for people being responsible for their personal finances. Become aware and educated when it comes to making large purchases, opening a credit card, obtaining loans, read up on interest rates, get a credit report, always read the fine print on contracts, etc…, but wouldn’t it be nice if someone was looking out for you also?
That’s where the Consumer Financial Protection Bureau (CFPB) comes in. The CFPB began operation on July 21, 2011. The CFPB is intended to educate consumers, supervise banks, credit unions, and enforce Federal consumer financial laws, as well as study to understand consumers, consumer financial markets, and financial service providers. Yesterday, January 4, 2012, Obama appointed Richard Cordray as the director of the bureau. Some of the items Richard stands for are lowered crime, protecting the environment, and the protection of children and families.
This is the place to go if you’ve got a consumer complaint, but again I urge you to do your homework as a consumer. Below are a few of my tips on navigating the world of consumerism.
1. Do a Credit Check
First off, take a look at your credit score. Even if you think you don’t have a credit history I suggest taking a look anyway. You may be surprised and should be positive with where you stand before making large purchases or opening a credit card. A good credit score is about 650+, but even if your score is less than favorable you can always work on making it better.
2. Opening a Credit Card
Not all credit cards are created equal. You gotta match your needs to your credit card. Take a look at where you are in your life. Are you a student with little or no credit history? If so, many of the major credit cards offer student & prepaid cards. Do you have a lot of credit cards already? If so, a balance transfer card may be best for you to consolidate all your other credit cards balances into one that has a lower interest rate. Most importantly, make sure you have the money to pay off your credit card before you use it.
3. Interest Rates
When you take out a loan an interest rate is applied. The lender will charge an annual price to the borrower which is usually a percentage of the total loan amount. Interest rates vary based on credit history, interest rate type, debt to income ratio, and inflation. If you are thinking about taking out a loan, be sure to find out from the lender what kind of interest rate you could get for your particular situation and if you can do anything to improve it to lower your interest rate before moving forward.
4. Reading the Fine Print
I’m sure you guys know this one, but I can’t stress enough the importance of reading the fine print when signing anything. If you come across a word or concept you don’t understand ask whoever is requesting you to sign those papers to explain to you what you don’t understand. Make sure you fully understand and if you get some bullshit answer tell them you’re not signing until they get someone over there who knows what they are talking about.