By now, you may have heard of a little something called the Credit Card Accountability, Responsibility and Disclosure (CARD) Act of 2009, which was just recently passed by the US Senate. It differs a bit from it’s predecessor, the Credit Cardholders’ Bill of Rights Act of 2009, which was passed by the House of Representatives. So there’s some reconciling that still has to occur before the bill can be passed to President Obama to sign.

I think there’s a lot of good in these proposals, but the New York Times article on the subject, Senate Passes Credit Card Restrictions, had one line in it that caught me off guard:

“It would be harder for companies to issue cards to people under age 21.”

Wait, what? Ok, I understand the motivation here — really, I do. The amount of debt that college students graduate with can be staggering. Credit card companies hawking awful cards under the banner of “Free T-Shirt!” on college campuses… well, that’s pretty bad. But regulation to make it harder for young people to get access to credit? Is that really what we need?

Searching for more information, I asked folks on Twitter if they knew the details of this part of the bill, since the NY Times only had that one sentence on it. Joe C helpfully pointed me to the article Democrats Vow Not to Bend to Credit Card Companies, which explained a bit more about the proposed regulation:

“The bill also would prohibit lenders from giving cards to people under 21 unless a parent or guardian accepts responsibility for the debt or the individual can prove they have the means to pay it back.”

That all sounds well and good… but what does “prove they have the means to pay it back” mean? Don’t we already have to list household income when we apply for credit cards? Again, I get where this is coming from. But it doesn’t seem like it’s the right way to go about this. Let’s face it — parents don’t always act in the best interest of their children. Some people turn 18 and need to start making their own decisions right away in order to get on the right track.

There’s a lot of ways in which we young adults aren’t being treated like adults yet. The Department of Education doesn’t consider us independent until we turn 24 (or get married, or join the military). We either can’t rent a car until age 25, or we have to pay through the nose to do so. And the problem here is not necessarily that college students/young adults shouldn’t be given credit cards. The problem is that some of us don’t act like adults when we get that first credit card.

But tell me: how is treating us like we’re not adults going to teach us to act like adults?

Of course, this is all just my opinion. And yes, there are several good things in the CARD Act that I didn’t touch on here. But based on everything I’ve seen, there’s already an effective remedy for curbing credit card abuse in college. It’s something my college did, and I would like to see more colleges do: they banned credit cards from advertising or soliciting on campus. That way, only those of us who really wanted a credit card on its own merits went out and applied for one. This severely cut down on the number of students at my school who even had credit cards, let alone abused them.

What’s your take? Do you think the proposed regulation would be helpful? It’s okay to disagree with me! (Just keep the debate dial turned somewhere around “friendly and informative,” please!)

You probably know that you have the right to check your credit report once each year, for free. And you might also know that there are actually three major credit reporting agencies, so you technically get three credit reports for free each year.

But have you thought about spreading out those credit reports, and not just getting all three at once each year? Here’s how I do it: I get one of my credit reports in January, another in May, and the third in September. Then the next January, I repeat! I happen to do them in this order: TransUnion, Experian, Equifax, but any order would do.

Why? Well, it’s a good thing to monitor your credit once a year. But a lot can happen over the course of a year. Say I checked my credit reports all at once, and the next week, my identity was stolen to open accounts under my social security number. I might not know about it until a full year later, when I checked my reports again. But if I pull one report every four months, I have a greater chance of catching an error (or a thief) in good time.

So, if you don’t pull your credit reports on a rotating schedule, I hope you consider it. If you already do, consider this your reminder to pull your next credit report now! (Assuming you pulled the last one in January, like I did.)

And remember, you should always get your free credit report from http://www.annualcreditreport.com, which is the site set up by the Federal Trade Commission. Other sites claiming to give you your “free” credit report might have singing pirates, but they’ll also try to charge you a monthly fee.

(You’ll be happy to hear there were no errors, or signs of identity theft, on the report I pulled the other day. It feels good to know that!)

A $2,000 balance may sound teeny-tiny to others drowning in debt, but my credit card balance was just the high-interest tip of the iceberg when I dropped out of school and finally faced my financial mess. And while I’ve still got student loans to worry on, I made my credit card balance disappear.

And I used some cool little tricks to help me pay it off.

Pay the Bill When You Get It

Credit card bills come by mail or by email, and they come about 20 days before they’re due. So you start calculating in your head, "How much can I drum up before the due date?"

Changing that train of thought could be the key to paying your debt off faster, and paying less interest along the way! Instead, think "How much can I put toward this bill right now?"

Here’s why it works:

1. Interest on credit cards is calculated based on the average daily balance for the statement.* Paying at the beginning of the statement means your average balance will be lower for the next bill, meaning less interest to pay!
2. You pretty much guarantee you won’t get hit with a late fee if you pay at the absolute first second instead of the last second. Late fees suck – this is a great way to completely avoid them.
3. You save yourself from forgetting – this can be incredibly powerful for some of us! Instead of having to remember to pay your bill, it’s already done.
4. Credit card companies can get sneaky, and move your due date to try and trip you up, and squeeze a late fee out of you. That won’t work on you if you’re paying the bill as soon as you get it!

*If you have double-cycle billing, interest is calculated based on the average daily balance for the last two months. Ew! That means even if you pay off your balance one month, you’ll still pay interest on it the next month – or two! Transfer your balance to a credit card that doesn’t have double-cycle billing. Quick!

If You Find More Money, Throw It At The Card

Many people don’t realize that you can make multiple payments toward your card each month. (Some cards charge a penalty for this, but most do not.) This can work to your advantage in several ways.

• Pay weekly instead of monthly. Make the minimum payment the first week after you get the bill, and then each week pay as much as you can.
• Or, pay as much as you can when you get the bill (ala the hint above), then pay more when you get it. Like, if you get an unexpected bonus, or find $20 in your coat. This process is called "snowflaking," and it’s great!
• Set up automatic payments from your checking account for the day you get your paycheck. Or the day after.

Track Your Progress

It may seem silly, but my insane spreadsheet motivated me more than anything else. It turned it into a game! "Hmm, if I can find $30 more to pay this month, I’ll pay off those plane tickets that I never should have bought in the first place!" Find a cool graphic online (there’s a ton – do a search for "countdown ticker"), keep a spreadsheet, or grab some paper and draw one of those red thermometer graphs!

Having some way to actually see the progress you’re making can truly make a difference. This requires that you know exactly how much you owe, so if you don’t, you really need to sit down and tally it up.

Snowball It

If you have more than one credit card that you owe money on, there are a few schools of thought on which one to pay off first. Followers of Dave Ramsey’s Baby Steps philosophy say to pay off whichever one has the smallest balance first. This will give you a physiological boost, and you’ll feel good enough to stick with it.

Or, there’s the school of thought that you should pay off whichever one has the higher interest rate, first. This makes more "math sense," as it will likely save you more money in the long run, and more money saved is more money to put toward the other cards.

Choose what works for you. Either way, list your cards (either by balance, smallest to largest; or by interest rate, highest to lowest), make the minimum payment on all of them, and throw all the extra money you can at the card on the top of the list. Once it’s paid off, you can start throwing the old minimum payment from the now-paid-off-card, as well as all that extra money you drum up each month, at card #2. And so on, it snowballs down until you’ve paid them all off.

Balance Transfer

If your credit score is good enough, you may be able to get a new credit card with an intro balance transfer rate of 0% for a period of time. Transfer your balance, and use the money you’re saving in interest to pay down the card faster. However, this only works if you follow some rules with it:

1. Do not drum up new debt, either on the old card or the new one. This is rule #1 for a reason! If you go out on a spending spree with your now-empty old card, none of these tricks matter, because you’ve dug yourself into the same hole again.
2. Watch out for "balance transfer fees." Usually they’re around 3% of the balance that you’re transferring. Try to get a card that doesn’t have this fee. If you can’t find one, do the math – make sure you’re saving more in interest than the fee, or else it’s not worth it.
3. Make on-time payments! If you’re late even once, you’ll lose that intro rate, and you’ll be paying interest again.
4. Try, as hard as you can, to pay off the whole thing before the intro rate expires. This is why I waited about a year to get a new card and transfer the balance – I wanted to make sure I could pay it off during the 12-month intro period. (And I did!)

Super ninja balance transfer hack: This tip is not for the faint of heart. It’s for those of us who are incredibly anal, and stay right on top of things. After you do the balance transfer, just pay the minimum payment on the new card. Then, take all the extra money you can sacrifice each month, and put it into a savings account. Then, less than one month before your intro rate expires, use the savings account money to pay off the card.

This will drum up some savings account interest to help you pay off the card. Not a lot of interest, especially with rates as low as they are now. But every little bit helps. This only works if you pay off the card before the rate expires, though! Even one day’s worth of credit card interest could wipe out all the money your savings account earned!

Further Inspiration

Want to see how some other people got out of credit card debt? Here are some of the stories that I really enjoyed reading:

JLP at All Financial Matters: How We Got Out of Credit Card Debt
How JD Roth at Get Rich Slowly began to see The Light at the End of the Tunnel
Trent at The Simple Dollar talks about how he made the debt snowball method work for him.

Things have, oh, hit the fan. What was supposed to be my last week of summer “vacation” has turned into “the incredibly crazy week where everything happens at once, and all the information I need in order to make decisions is still up in the air.” So while I simultaneously run around like a headless chicken and sit tight waiting for answers, I figured I ought to give you guys at least something to chew on.

So here: a bunch of links that I’ve been meaning to share, but haven’t yet been able to work into any posts. There’s some really great stuff that I’ve just been sitting on! Today’s theme is…

Credit Scores and Reports

Money Saving Tips: Credit Scores, Everything You Need to Know – Originally titled “Credit Scores: Yes, You Should Give a Damn,” this article by my good buddy Cap gives you the straight dope on what a credit score really is, and how to get yourself a good one.

How to Find One’s Credit Report and Credit Score Inexpensively and Safely – There are a lot of websites out there that offer “free” credit scores, when what they really mean is either “fake credit scores” or “take your information and sell it.” This guide will help you find your true credit report and score in the shark infested waters, without spending more that you have to.

FICO Score Estimator – Too broke or lazy to get your credit score? Me too. Well, the broke part, anyway. If you’re just looking out of curiosity, and don’t need the actual score for any reason, this estimator can help you figure out what range your score falls in.

Back in September, I applied for a Citibank student card, and had a terrible time verifying my student status. After a solid month of trying and getting the runaround, I dropped it and ended up getting a different card.

Times may have changed, though. A friend of mine applied for the student version of Citibank’s Driver’s Edge card, and was approved without having to submit any of the insane paperwork that I was asked for. Has anyone else applied for a Citi student card in the last few months? Did they make you verify your status as a student?

If this actually has changed, that changes my opinion on whether Citibank’s student cards are worth it or not!

Update: To my knowledge, Citi is still using this verification process. It appears that only certain people are selected for verification, for whatever reason. It may be random, or it may be based on the information you provide when you apply. Best of luck in avoiding verification if you do apply for a Citi student card!