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Choosing a loan or card, carrying a balance, and protecting the credit score that sets your rates. Borrow on better terms and pay off what you owe faster.
Private student loans don’t qualify for federal income-driven plans or forgiveness, so refinancing them gives up almost nothing. Once your credit or income has improved, prequalify with several lenders and take the lowest rate on a term no longer than the one you have left, if the new loan’s hardship terms match yours.
If you borrow to soothe stress or put off facing a shortfall, and keep sliding back into debt, stop relying on willpower and get help. Debtors Anonymous runs free 12-step meetings for compulsive debtors, and a nonprofit credit counselor can build a plan to repay what you owe.
A charge card has no preset spending limit, but unlike a credit card, it expects the full balance every month instead of a minimum payment. No preset limit doesn’t mean unlimited, so confirm a big purchase first and set autopay to pay your full statement balance.
On a joint credit card, each of you owes the entire balance, not half, and a breakup or divorce doesn’t change that. Open one only with someone whose spending you’d be willing to pay off alone. Otherwise, keep each card in one person’s name, so only its owner owes the bill.
A credit card refund doesn’t lower what you owe until it posts, and it doesn’t count as a payment. Until the credit appears on your account, pay as if you never made the return. Skipping or shorting the payment while you wait can cost you a late fee, interest, and a late mark on your credit report.
If your credit card statement shows a negative balance, that’s your own money, and it earns nothing while the card issuer holds it. Ask the issuer to send it to your bank account or mail you a check. Put the request in writing, and federal rules give the issuer seven business days to pay.
Most big card issuers will show you which cards you’re likely to get before you apply, and their check is a soft inquiry that doesn’t affect your credit score. Check the issuer’s pre-approval page first, and apply only for a card it offers you, because the application itself is a hard inquiry that can lower your score.
Under the credit bureaus’ own rules, a medical collection shouldn’t appear on your credit report if you’ve paid it, if its original balance was under $500, or if the bill is less than a year past due. If one appears anyway, dispute it with each bureau that lists it, and attach proof it breaks the rule.
To finish your car loan ahead of schedule, set autopay a little above your payment and tell the lender to apply the extra to principal, the balance you still owe. Most car loans charge interest only on that balance, so each extra dollar cuts the interest on every later payment. Check that yours does.
If you carry both a mortgage and student loans, put extra payments toward whichever charges the higher rate after taxes, not the bigger balance. Skip federal loans you expect to have forgiven, since extra payments only shrink the forgiven amount, and leave a low-rate mortgage on its regular schedule.
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