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Your credit card questions answered

By Leslie McFadden · Bankrate.com
Monday, June 28, 2010
Posted: 3 pm ET

Today I'm answering three credit card questions that landed in my column inbox.

My wife had a credit card with a retail store. She listed me as an authorized user. I was not aware of this. She let this card go and it got charged off. (It was only $250. If she had told me about it, I would have probably taken care of it). Now it is showing up on my credit. It is the only bad thing on my credit. Do you know how I could get this removed?

--Dan

Dan, ask and you should receive. You can either ask the bank that issued the card to remove you as an authorized user, or dispute the authorized user account with the credit reporting agencies. Writing in her column for Experian, one of the three major credit bureaus, Maxine Sweet says, "Creditors will typically remove you as an authorized user upon request because you have no responsibility for payment. Experian also will remove the account from your credit report at your request or if you are no longer reported as an authorized user."

You'll need a recent copy of your credit report ordered from the agency you've contacted to dispute the account. You can check all three of your credit reports for free at AnnualCreditReport.com.

My daughter just graduated from college and would like to open a credit card account. Her first application was denied, citing lack of credit history as the reason. This lack of credit history is the exact reason why she wants to open an account, as she anticipates that she will need a good credit history to rent an apt. in the near future. Do you have any suggestions?

--Sandra

Annoying Catch-22, isn't it? Luckily, she has options. Secured credit cards, retail or gas cards, and even some prepaid cards can help her establish a credit history. My story, "Best ways to establish credit" explains the pros and cons of each product.

What is the best rewards card for someone who doesn't carry a balance and has perfect credit? Cashback is preferable. Lowcards.com and cardratings.com are too vague.

--Eric

Eric, the best credit card for you will depend on your spending habits. For instance, Blue Cash from American Express will give you a 5 percent cash-back rate for "everyday purchases" and 1.25 percent on other purchases, but only after you've spent $6,500 during the year. If you're not a heavy spender, racking up $1,000 or more in monthly charges, cards with tiered reward rates probably aren't the best choice. My story, "What is the best cash-back reward card?" offers some card suggestions based on your usage level.

Have a question about credit cards or credit scores? Ask it here.

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7 Comments
Jack
August 12, 2010 at 7:23 pm

Annette,

You either get her to sign a promissory note, pay the balance off and close the account or go to the police and file a complaint. The card companies want to see affidavits and police reports not accusations. Then, work with the card companies showing the closing of the business and either the promissory note or police report.

It was her responsibility (and yours) to close the account at the dissolution of the business.

carditcard
August 09, 2010 at 3:04 am

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ANNETTE TIPPETTS
July 27, 2010 at 8:41 am

IN 2003 I HAD A COMPANY WITH ANOTHER PERSON. WE CLOSED THE COMPANY IN 2003 AND SHE KEPT USING THE CREDIT CARD FOR THE NEXT 7 YEARS. I JUST FOUND OUT SHE HAS A 11,000 BILL ON IT. I FOUND OUT I AM THE MAIN HOLDER ON THE CARD AND SO THEY WOULD NOT TAKE MY NAME OFF IT. SHE HAS ALWAYS PAID THE BILL BUT HER HOUSE IS GOING INTO FORECLOSURE. DO I CALL THE CARD COMPANY AND ACCUSE HER OF FRAUD TO SEE IF THEY WILL TAKE ME OFF. THE INTEREST IS AT 22 PER CENT. SHE WENT OVER THE LIMIT OF 10,000 AND GOT A LOT OF FEES. I HAVE NOT CLOSED THE ACCOUNT AS I AM CLOSING ON A LOAN FOR A RENTAL HOME IN A FEW DAYS. THEN I WILL CLOSE IT--SHE SAID SHE WILL NOT PUT ANYTHING ELSE ON IT. HOW SHOULD I PROCEED?

Leslie McFadden
June 30, 2010 at 10:28 am

Henry, closing several cards out can make your overall debt-to-credit limit ratio increase temporarily, which could cause a dip in your score. My blog post, "How does closing a credit card affect credit score?" http://bit.ly/d9pNme goes into more detail. If your credit score will be checked anytime soon, I would wait to shut down those unused accounts. If possible, hang on to your most generous credit lines, and your oldest account.

henry domanski
June 30, 2010 at 8:42 am

I have a very good credit score, but I carry about 10 credit cards, half of which I don't use. If I close those cards that I don't use....How will my score be affected?? ( I usually pay off the others monthly.
Thanks.

Reggie Masterson
June 29, 2010 at 8:32 pm

Hope your wife isn't getting into credit card debt like an estimated 54,000,000 Americans. If you or someone you know has excessive credit card debts, a free credit card consolidation consultation may be the answer.

Paul Mumford
June 29, 2010 at 5:24 pm

I read the article on how to travel with a cc. My comment is about the advice "to the call your bank ahead of time" Don't be fooled into thinking that "having your account notated" will prevent you from being stranded on the far side of nowhere. At most banks, I worked for a major bank, a notation is often never seen and is not picked up by the automated system that sends up the warning flag and locks your card. The note will only help after your card has been declined and you find yourself calling long distance to ask the bank why. Of course the upper management folks that instruct us to call in advance fail to mention that this is a poor system at best and the real reason they cut you off is to protect themselves, not us. The general rule of thumb is to "let a few clients suffer" to protect the bank embarrassment or liability. I promise you, we stranded people all over the world and then penalized them for having the audacity to travel with our bankcard.