If you are surprised to see a small charge ($1 or $1.26 or some such amount) on your credit card bill, don't write it off as "no big deal." A tiny purchase or charge is a strategy often used by scammers to find out if your card works and if you are paying attention to your credit card bill. If the small "test charge" goes through unchallenged, then the thieves may proceed to make larger purchases on your card. This occurs more than a million times a year in the United States.

Moral of the story: even a small charge can be a problem, so if you see a charge you didn't make, contact the credit card company immediately.
(note: even if you're not sure, call and ask – the company can tell you more about where the charge was made, to help you figure out if it could be a purchase made by you or someone in your household).

Source: Consumer Reports Money Adviser, August 2006.

The good news: under the Federal Fair Credit Billing Act, $50 is the most you can be liable for if unauthorized charges appear on your account, and many credit card companies will waive even that liability. For more information about the Fair Credit Billing Act, go to http://www.ftc.gov/bcp/conline/pubs/credit/fcb.htm

The bad news: even if credit card holders don't pay for those losses, the companies do. And how do companies cover increased costs? That's right - by passing them on to consumers. Therefore, by being vigilant in all our consumer transactions, not only do we save money for ourselves, but also for all other law-abiding consumers!

Source: Barb Wollan – Iowa State University Extension
Local Source: Susan Taylor, 708.720.7520

Credit Card Warning Signs

It's always good to be aware of warning signs. If you hear a funny sound in your car, you'll want to get it checked out. If your teenager's grades drop surprisingly, you'll look into it to find out if there are more serious problems behind the change. If you start losing weight unexpectedly, you'll see the doctor to find out what's wrong.

The same is true with your finances – warning signs are important. Below are five signs that you may be over-using credit. Credit cards are probably the most common cause of credit overuse, but even those who don't use credit cards may develop a problem with overusing credit.

?Using credit to meet basic needs
?Juggling payments
?Obtaining new credit to meet demands of existing credit
?High debt-to-income ratio
?Use of payday loans and rent-to-own

If you have reason to believe you are in credit trouble (or on the verge of credit trouble), now is the time to act.
What to do?
1)Stop adding to your debt load (in other words, don't borrow any more, on credit cards or elsewhere)
2)Cut your expenses so you can pay as much as possible toward your debts. Use PowerPay (www.powerpay.org) to find out how much difference even a little extra payment can make.

Prevention is always the best cure – get your credit behavior under control now to avoid greater problems in the future!

Source: Barb Wollan – Iowa State University Extension
Local Source: Susan Taylor, 708.720.7520