Personal Finance Explaining the Statute of Limitations on Debt

By Steve Bucci

Published November 04, 2011

| Bankrate.com

Dear Debt Adviser,

I have several items on my credit report that list a date to be removed. I thought after seven years negative items — except for government items such as student loans — are gone and no longer haunting. I spoke to someone at the law firm that received my debt. He said he couldn’t explain it to me but that even after seven years, while the debt might not be on my report, the company can still come after me for the debt through courts and garnishments. How does this work really? This one in particular is scheduled to expire this year, and I don’t want to struggle finding the money for it if it’ll be gone after that date. Any help would be greatly appreciated or at least point me in a direction where I can get the information. Thank you very much.

– Christine

Dear Christine,

I can understand why you are confused. Believe me, you are not alone. What is going on here are three different threads all attached to the same debt. First, there is the reporting of the debt by the credit bureaus. Second, there is the debt itself you owe. And third, there is the statute of limitations in your state that limits the collection options a collector can use in pursuing you for the debt you owe. Here’s how it all works:

Garden-variety debts such as credit cards, mortgages or loans stay on your credit report for seven years, depending on the state. Debts to or guaranteed by the government, child support and bankruptcies stay on for 10 years to life. Many people mistakenly believe once a debt no longer appears on their credit reports, it is no longer owed. The truth is the debt is owed as long as it is unpaid or otherwise settled.

However, state laws prevent a collector from using the courts (to seek a judgment that can be used to garnish wages or bank accounts, or place liens on real property) if the debt has passed the statute of limitations time frame set by the state. The clock starts on the statute of limitations from the date of the last payment made on the account. You can determine the statute in your state by visiting the website of Nolo, a legal information company.

An important element to keep in mind with statute of limitations laws is that, in most states, any payment on a debt restarts the clock. For example, let’s say the statute of limitations in your state is four years, and you have not made a payment on your debt for five years. But, in a moment of weakness, after being harassed by a collector, you sent in a payment. In most circumstances, the statute of limitations clock is restarted by your payment, and the collector would be within their legal rights to use the courts to collect.

So, the bottom line is you may still receive calls and/or letters from collectors attempting to collect your old debts, even those that can no longer be reported to the credit bureaus and appear on your credit report. The only sure way to make old debts go away (those that you are certain you owe) is to pay them, settle them or have them dismissed in a bankruptcy.

In your case, I suggest you answer any correspondence from any collectors. Tell them the debt is past the statute of limitations in your state, and you don’t intend to pay anything. A collector who has been notified that a debt is unenforceable can be sued if they pursue it in court.

Good luck!

Bankrate’s content, including the guidance of its advice-and-expert columns and this website, is intended only to assist you with financial decisions. The content is broad in scope and does not consider your personal financial situation. Bankrate recommends that you seek the advice of advisers who are fully aware of your individual circumstances before making any final decisions or implementing any financial strategy. Please remember that your use of this website is governed by Bankrate’s Terms of Use.

Read more: http://www.foxbusiness.com/personal-finance/2011/11/03/explaining-statute-limitations-on-debt/#ixzz1d3mKuys6

Cards for the Bank or Plastic Averse

From WSJ.com and Market Watch

By JENNIFER WATERS

Reloadable prepaid cards are magic bullets to help overspenders and those who steer clear of banks. But they won’t build your credit and can cost you plenty in fees if you’re not careful.

“If you know what questions to ask and you spend some time shopping, prepaid cards can be a positive tool for managing money and can even be a substitute for a traditional checking account,” says Jennifer Tescher, chief executive of the Center for Financial Services Innovation, a consultant specializing in serving the unbanked.

Network-branded prepaid cards are peddled primarily to the roughly nine million so-called unbanked U.S. households, those, according to a 2009 Federal Reserve survey, without any checking or savings account. Another 21 million households are underbanked. Taken together, that accounts for some 60 million adults, or one-quarter of U.S. households.

Of those households, only 28% have used a prepaid card, meaning there’s plenty of untapped opportunity. Most credit-card experts expect prepaid-card use to explode beyond the 20%-plus annual growth of the past five years as banks pile on charges for debit cards and checking accounts and impose hefty minimum balances on checking accounts to waive fees.

“Prepaid cards offer a compelling value because they fill a growing void created by increasing fees for checking accounts,” says Michael Flores, chief executive of Bretton Woods, an economic research firm.

They also are gaining traction with high-school and college students whose parents fund the cards. And they have been used by the government for unemployment benefits and disaster-relief aid. Many employers also issue prepaid health cards tied to flexible health-care spending accounts, eliminating the wait and paperwork for refunds. Others deposit pay directly onto prepaid cards.

For people with bad credit or spending problems, prepaid cards allow them to operate in a plastic-ready world by using the cards to pay for airline tickets, online purchases, hotel stays and car rentals—all of which require a credit or debit card.

But don’t be fooled by promotions that offer no credit checks and promises to notify credit bureaus of your positive financial behavior. These aren’t lines of credit, so there’s no need for a credit check, and credit-rating companies don’t care how you use them, just like they don’t care how you spend cash.

Though they can be cheaper than holding a checking account or having a credit card, prepaid cards are far from free. Many are loaded with fees for gaffes like inactivity or cancellations and will charge you for balance inquiries and bill paying.

“You have to be a fine-print warrior,” says Beverly Harzog, Credit.com’s credit-card expert. “Every card is different. Some cards are more transparent about their fees while with others you have to look all over the fine print to determine all the fees.”

Plan on a start-up fee of sorts to activate and load the card. Most cards have monthly fees that can be as high as $9.95. Some will charge to transfer money from one card to another or to write checks.

Among the cheapest cards, Wal-Mart MoneyCard MasterCard, which is issued through GreenDot.com, has a $3 monthly charge. American Express’s new prepaid card doesn’t charge one at all. But you must reload the American Express card from a bank account, which makes it useless for the unbanked who will need a GreenDot MoneyPak. The MoneyPak is a means of loading cash onto the cards, much like buying an airtime card for a prepaid cellphone. Each card costs $4.95 and cannot hold more than $500, which means you have to buy a new one once the money’s gone.\

American Express cards do charge you to withdraw money from an ATM, $2 after the first withdrawal each month. Wal-Mart charges $3 to reload and $2 for a cash withdrawal from an ATM and $1 for a balance inquiry. Those ATM charges are on top of the fee the owner of the ATM is charging.

Here are some tips for finding the prepaid card that works for you:

• Like everything you financially bind yourself to, read the fine print. For some of these cards, reading what’s on the website might not be enough, so read the literature that accompanies the card before you purchase it.

• Look for cards with low or zero monthly fees. There aren’t many of them, so you have to look hard.

• Get reloadable cards so you’re not paying an activation or fulfillment fee for a new card.

• Look for cards that don’t charge transaction fees or inactivity fees.

• Opt for direct deposit to fund prepaid cards. It will save you load fees and in many cases, monthly fees, not to mention a trip to a retailer.

• Don’t count on prepaid cards to help you build credit. Like checking accounts, major credit agencies don’t look at them to chart your financial behavior.

• Some cards provide overdraft coverage, similar to a checking account. But plan to pay hefty charges for it.

• Most cards will give you one to two free ATM withdrawals a month but then charge for extras.

• Many cards will allow you to get cash back from the cashier at the point of sale, which will help avert ATM fees.

• Not all cards are protected if lost or stolen, so guard them as you would cash and be wary of who you give the card number to.

—Jennifer Waters is a columnist for MarketWatch in Chicago.

9 Myths About Fixing Your Credit

From MSN.com

Building better credit takes patience, discipline and a clear understanding of the strategies that really make a difference. Start by knowing the financial moves that don’t work.

Like child rearing and curing ailments, credit building is chock-full of old wives’ tales. Smart financial moves such as closing accounts or paying off loans early may not be the credit boosters you think they are.

Sadly, there are no real quick fixes despite what some commercials or online credit-repair ads might proclaim. The key to increasing your credit score is good payment behavior along with time and a healthy mix of credit types.

To help you sort the facts from the fiction, Bankrate tackles some long-held but bogus beliefs that won’t help you build better credit.

1. Opting out of credit card offers will help

Many consumers assume if they opt out of credit card offers, there will be fewer credit inquiries on their credit reports, says John Ulzheimer, the president of consumer education at Smart Credit. However, those inquiries are considered “soft” inquiries and don’t affect your credit score, Ulzheimer says. You can keep the offers coming if you’d like, but doing so won’t help you build better credit.

If you want to opt out of offers to reduce your junk mail, call toll-free (888) 5-OPT-OUT/(888) 567-8688, or visit OptOutPrescreen.com to remove your name from the credit-reporting agency lists for unsolicited credit and insurance offers. That will remove your name for five years.

To keep your name off the list, mail in the permanent opt-out election form available on the website. Consumers can also opt in on the website if they’ve already opted out.

2. You can bump hard inquiries off your credit report

A “hard” inquiry is generated when creditors pull your report or score after you apply for a loan or line of credit. Your score falls because it shows you’re interested in taking on more credit and, therefore, more risk. Other inquiries are considered “soft,” such as those triggered by you, your employer or companies sending credit card offers in the mail.

Some consumers believe if they pull their credit report every day to load up on “soft” inquiries, they will bump off the hard ones that weigh on their credit score.

“It’s speculative. There’s no indication there’s a finite amount of space for inquiries,” says Ulzheimer. And it’s only a small part of the score. “There’s better bang for your buck if you do more legitimate things.”

3. Closing old accounts will boost your score

This is a hard-to-kill-off myth. Closing accounts typically won’t help your score and could possibly dent it, says Trey Loughran, the president of personal information solutions at Equifax. The results can shorten your credit history eventually and leave you with a smaller amount of available credit, both of which can harm your efforts to build better credit.

The length of credit history shows how seasoned a borrower you are, so the more positive experience you have, the better. Having more available credit helps to keep your utilization rate low. The utilization rate is how much available credit a borrower uses; the lower the percentage, the better.

“Say you have $100 in debt with $1,000 in allowable credit across multiple accounts and you close a credit card with a limit of $500. Then you doubled your utilization rate from 10% to 20%,” Loughran says.

4. Opening many accounts will improve my credit score

Some consumers with credit problems believe opening many accounts will be proof that they can handle credit. Actually, it has the opposite effect.

“That makes lenders scratch their heads and wonder why you need all that credit,” says Rod Griffin, director of public education at Experian. “It’s a sign of risk.” Your credit score can suffer as a result.

What lenders will see is a boatload of new, hard inquiries on your credit report. Those inquiries will deduct from your credit score, while lenders will worry that you’re in dire financial straits and desperately need access to credit to make ends meet.

5. Paying off delinquencies will restore your credit score

Nope. It will help, but don’t expect a supersized boost, says Ulzheimer. That’s because the delinquency will stay on your report, even if it has a zero balance.

6. Paying off loans early is better than making payments

“It’s a Catch-22,” says Sarah Davies, the senior vice president of analytics, product management and research for VantageScore Solutions, because while it may be good for your personal finances to pay off a loan, it doesn’t do much for your credit score.

Indeed, a closed, paid-off account adds to your score, but an open credit account in good standing boosts it more.That’s because an open account shows you’re consistently handling credit wisely. A closed account only shows good payment behavior in the past and becomes less and less predictive of future habits.

7. Paying before the due date helps your credit score

Your credit score takes into account how much available credit you’re using. Paying a credit card balance in full 10 days or one day ahead of the due date won’t help your utilization ratio and thereby improve your score. That strategy doesn’t work because the balance of the account has already been reported to the credit agency, says Ulzheimer.

However, if you pay the balance in full before the statement closing date, which appears on your statement, your report will post a zero balance for that account. That will help your utilization rate, or how much credit you are using, along with your credit score, says Ulzheimer.

To get started, you will have to pay one credit card bill earlier than usual and then consider your statement date as your due date, says Ulzheimer. Also, you will need to check your balance online or over the phone to make sure you pay the correct amount.

8. All delinquencies are created equal

If you’re in the unenviable position of having to miss a payment, choose carefully. Missing a mortgage or auto loan payment will ding your credit more than skipping a credit card payment will. “Those are more substantive debts, so they carry more weight in the credit score,” Davies says.

Of course, missing a payment is a last resort. Pay the minimum payment to keep accounts current. To head off a catastrophe, contact a nonprofit credit-counseling service that can help you work with your lenders to come up with a more affordable, temporary payment plan or another solution.

9. I can’t have any negatives on my report

“I’m here to tell you that you can have anything from a 30-day missed payment to a bankruptcy on your report and still have a really good score,” says Barry Paperno, the consumer operations manager at MyFICO.com.

The most recent information on credit reports is weighted more heavily than older data, Paperno says. So if you have a bankruptcy from five years ago but have had good credit performance since, it’s possible to have a 700 FICO score.

To build better credit, Paperno preaches consistent good payment behavior instead of a quick fix. The advice is simple: Pay the minimum payment every month at least, if not the full balance. Diversify your account types, and keep balances low. The result will be a higher credit score.

Alternatives To Bankruptcy

From National Association of Consumer Bankruptcy

Although bankruptcy is often a solution to a debtor’s problems, bankruptcy is not always the best solution. Although bankruptcy is almost always available, it may not always be needed.

Disputed Debts

One alternative is to fight disputed debts. If a creditor sues you for a  payment on a debt you don’t believe is justified, you may be able to defend against the creditor’s action.

There may sometimes be a real dispute about whether a debt is owed. For example, a home improvement contractor may arrange a mortgage loan to pay for the job but then do shoddy work or not complete the job. Similarly, there may be misrepresentations in a transaction to buy a car or to finance some other major purchase.

Fighting Your Debt In Court

In such cases, the solution may be to fight the debt in court. Of course,  unless free legal counsel is available, the costs of such a lawsuit may be considerable. If the debt is large enough, though, it may be worth the investment to obtain a fair settlement. In many cases where a consumer protection statute is violated, the creditor may be required to pay the debtor’s attorney if the debtor ultimately wins the case or obtains a favorable settlement.

Nondisputed debts

If a debt is not disputed, there are some alternatives to bankruptcy. A few of the common alternatives are as follows:

Working Out Informal Payment Agreements With Creditors:

If your debts are relatively small, you may be able to enter into agreements with your creditors and avoid a bankruptcy proceeding. Nonprofit credit counseling agencies can usually assist in working out such arrangements.

Refinancing Debts

A debtor may be able to arrange a debt consolidation loan that will allow him or her to pay bills as they fall due. Although a debt consolidation loan does not eliminate any of your debt, the new loan may have a longer maturity and be at a lower interest rate than the individual debts. However, debtors should be very wary of consolidating unsecured debts such as credit card debts into a  mortgage loan, because in doing so they will usually transform debts that can be eliminated in bankruptcy into debts that cannot be eliminated.

Financial Assistance Under State Law

Often states have programs that will help you with utility or mortgage bills.  Before filing for bankruptcy, you should investigate these programs.

Thinking that Bankruptcy may be a solution?

By Attorney Michael Eramo

You are visiting our website because you likely overwhelmed by debt or have received a Legal Notice from your mortgage company attorney informing you of their intent to foreclose on your home.  DON’T PANIC.  My office helps people who face this problem every day.  This is what we do.

What Options do I have?  Will I benefit by filing for Bankruptcy?  What is Bankruptcy?

Bankruptcy is not a “bad” word. It is a Federal Law that protects…”Honest people” “Overwhelmed by debt” seeking “help” or commonly referred to as a “Fresh Start”….It is our Government’s way of protecting good people, like yourself, to regain control of their financial and in many cases their personal lives. There are many reasons why people find themselves facing a foreclosure or overwhelming debt. Divorce, loss of a job, addiction, illness, and so on…. If you are honest, and just overwhelmed financially,you need to call and speak with a qualified bankruptcy attorney.  You have options.

You may learn that filing for a Bankruptcy is the right decision. People usually file for a chapter 7 or chapter 13.  A chapter 7 liquidates your debts if you qualify. A chapter 13 may allow you 36-60 to pay back your arrears on your mortgage while you stay in the home. It may allow you time to market and sell your property without the bank foreclosing.  It may allow you time to refinance yourself out of bankruptcy. Every situation is different.  A qualified bankruptcy attorney can guide you through the options and strategies available.

My Office can help you make Informed Decisions. My office staff is exceptionally well trained to guide people through this very difficult time with compassion and a high degree of skill and commitment. The Federal Bankruptcy laws recently were changed by sweeping reforms.  My office knows the laws and how to best protect your interest.

How To Choose The Right Bankruptcy Lawyer

Which lawyer should I go to? This is an extremely important question.

The fact is that “NOT ALL BANKRUPTCY ATTORNEYS ARE CREATED EQUAL”. The truth is that there are some terrible bankruptcy attorneys…even some of the ones who supposedly do nothing but bankruptcy.

What’s hard is that…to the public…we bankruptcy attorneys sort of all look the same. And to make things worse, the cost of the attorney is not necessarily a good indicator of who’s good and who’s not. A cheap bankruptcy attorney could be someone who’s not going to give you good service and an expensive bankruptcy attorney could be someone who needs to charge more because he or she is not organized enough to provide you services in an efficient manner.

Filing bankruptcy will have a significant impact on your life for years to come…..and to makes things much worse, bankruptcy law is very complex, with many twists and turns, and traps for the unwary. In fact, it’s so complex and complicated that non-bankruptcy attorneys tend to avoid it like the plague.

The really sad truth is that the results to be achieved under the bankruptcy laws can vary tremendously depending upon whether you fall into the hands of a good versus bad bankruptcy attorney. I see the harm brought to good people brought about by bad attorneys every day.  Don’t let it happen to you.

If you need to file bankruptcy…choosing the right lawyer is critical.

In many cases, the simple truth is that the more experienced attorney will do a better job, which means getting you the most benefit from filing and avoiding the mistakes that someone less experienced is bound to make. And…the more experience…the better.

An attorney who is just starting out in the practice of bankruptcy law, for example, is doing just that, “practicing”. Guaranteed, you do not want that attorney practicing on you. So…

Don’t take chances. Here are some of the questions to ask in order to find the best available bankruptcy lawyer:

  1. Do you practice bankruptcy law full-time?
  2. How many years have you done bankruptcy full-time?
  3. How many bankruptcy cases have you filed?
  4. How many Chapter 13 bankruptcy cases have you filed?
  5. Do you attend all the Federal, State and local bankruptcy seminars?
  6. Are you a member of the National Association of Consumer Bankruptcy Attorneys (NACBA)?
  7. How good is the lawyer’s reputation?

Applying For Credit Cards After Bankruptcy

By Michael Estrin • Bankrate.com

Bankruptcy might ravage your personal finances, but that doesn’t mean you still can’t apply for new credit cards.

In fact, issuers are likely to send you a slew of offers after your case closes. Before you take them up on their offers, however, you’ll want to put yourself on a path to financial stability. Here’s what you need to know about applying for credit cards after bankruptcy.

Consider a Secured Card

Rather than going for traditional credit cards, many consumers recovering from bankruptcy opt for secured cards as a way to improve their credit scores without the risk of getting in over their heads. A secured card requires a cash collateral deposit that becomes the credit line for that account. Cardholders can spend up to the limit, but if they fail to pay off the balance at the end of the month, the deposit is used to cover the bill. Make sure the issuer reports the card to all three reporting agencies so you can build your credit score.

Unsecured Credit Cards

After a bankruptcy, you still can apply for conventional credit cards that are unsecured. But with these cards, it’s important to check upfront fees. Similar to a secured card, you’ll want the credit agencies to be updated. After bankruptcy, you credit is important. Building credit and staying on top of your payments will make all the difference when it comes to your credit score. Think of applying for a credit card and staying on top of your payments as an initial way to start regaining financial stability.

Buy Only What You Can Afford With Your Credit Card

Most consumers can be approved for credit cards after bankruptcy, however, the real challenge is learning to live within your means.

Budget Accordingly to Regain Financial Stability

Experts advise that you set and stick to a reasonable monthly budget. That means making sacrifices, but it also means smart spending. Don’t buy something on your credit card that you wouldn’t normally buy. A credit card is not a reason to make a large purchase that you don’t need. Keep yourself on a frugal budget and spend graciously.

Consumers should use their new plastic to rebuild their credit scores, not to finance purchases they can’t afford. When you apply for a credit card after a bankruptcy, make a commitment to use your new card to charge and pay off regular expenses such as utilities and groceries.

Massachusetts Homestead Laws have changed. Understand how it affects a bankruptcy filing.

Chapter 395 of the Acts of 2010, an Act Relative to the Estate of Homestead, revises and replaces the provisions of the Massachusetts homestead protection law, General Laws Chapter 188. An overview of the new Homestead reform legislation, effective on March 16, 2011, is provided in Secretary’s Galvin’s Homestead Act Questions and Answers pamphlet.

If you filed a homestead declaration prior to March 16, 2011, your $500,000 protection will continue to apply. There is no need to re-file your homestead protections due to these statutory changes. The new law creates an automatic $125,000 protection on homes that do not have a homestead declaration filed at the Registry of Deeds in order to safeguard deposits and situations where a declaration may be incorrectly filed. Homestead protections now extend to pre-existing debts and the proceeds of a sale or insurance coverage.

Trusts are now eligible for homestead protections. For those individuals over the age of 62 (elderly) or legally disabled, the new law now expressly states that a homestead may be filed on each individual’s behalf and the aggregate protection increases to $1 million. Homestead declarations filed on manufactured homes must now be filed at the local Registry of Deeds, not the town offices.

If you are purchasing your new principal residence, your closing attorney must provide you, as a mortgagor, with notice of your right to declare a homestead protection. At that time, you will be asked to acknowledge receipt of this notice in writing.

If you have any further questions or concerns about how the Registry of Deeds can assist you in filing a declaration of Homestead, please do not hesitate to contact the Registry of Deeds office directly. We are here to serve you.

This information is not designed to provide any legal advice or address the practical effect of a claim of Homestead. As in all areas of the law, to fully understand what your rights are you should consult an attorney of your choice.

Be sure to speak with a qualified bankruptcy attorney to understand how the new homestead law may affect your bankruptcy filing.

Check out the many Massachusetts Registry of Deeds for Homestead information.

Demystifying your credit scores

From MSN.com, 8/10/2011 1:44 PM ET
|By CardRatings.com

Understanding how your scores are determined can help you find the credit card that best suits your needs. Consider these 8 possibilities.

Credit card issuers make fast decisions, bolstered by credit scores that boil down the last decade of your financial history into a three-digit number. A difference of a few points can upgrade your credit card rewards program or eliminate a balance transfer fee. However, few of us take the time to understand where our credit scores come from and how they affect our selection of credit card offers.

Who Determines Your Credit Scores?

Until recently, only FICO issued authentic credit scores. When you apply for a loan or a line of credit, your potential lender collects information on your credit history from one or more of the three major credit-reporting agencies (TransUnion, Experian and Equifax) and plugs it into FICO’s proprietary algorithms, or a variation sponsored by the lender’s preferred credit bureau.

The FICO system weights your credit history based on the information available, usually just the sources to which a particular bank subscribes. Because banks may subscribe to as many as four different credit-scoring systems, credit report accuracy across multiple bureaus has become essential for effective personal finance management.

How is your FICO score calculated?

According to FICO, five elements make up your credit score:

  • Payment history (35%)
  • Your credit utilization, or how much of your credit you’re actually using (30%)
  • Length of your credit history (15%)
  • Recently issued credit (10%)
  • Types of credit used (10%)

Experian launched its VantageScore algorithm as an alternative to FICO, with a few tweaks to the traditional model that emphasize available credit and your overall debt load. TransUnion and Equifax use their own versions of credit scoring, and all three credit bureaus assign “letter grades” to consumer credit profiles. (Know your score? Take this quiz to get an estimate.)

How do Banks Rank Credit Scores?

Finding the best credit card often means having to know where your credit scores fall on the spectrum of typical consumers. Over the past few years, lenders have ratcheted expectations skyward. Before the financial crisis of 2008, many banks considered a 680 FICO score “good.” Today, it’s just “fair.” Research from FICO, Experian and Informa Research reveals how banks look at credit scores today:

  • Excellent: 760-850 on FICO, 900-990 on VantageScore or an “A” letter grade.
  • Good: 700-759 on FICO, 800-899 on VantageScore or a “B” letter grade.
  • Fair: 620-699 on FICO, 700-799 on VantageScore or a “C” letter grade.
  • Poor: Below 620 on FICO, below 700 on VantageScore or a “D” or “F” letter grade.

You may also have heard a bank representative or a mortgage broker note that you’ve got a “thin credit file.” That just means your limited credit history makes it hard for a credit card issuer to figure out whether you’re a good risk. Building a track record with a student credit card or secured credit card usually improves your score over time.

Best-Rated Cards for Each Credit Score Range

The best-rated credit cards in each category reveal how lenders view each group of consumers. As risk increases, so do finance charges and fees. Bank managers often rely on the aspirational nature of credit card brands, hoping that you’ll settle for a deal in the category just below your current score range. To help you get started, here are eight popular credit cards (two in each category) that have a reputation for fairness based on acceptance, finance charges and rewards. (Find a better credit card.)

Excellent Credit

The best credit card companies save their most impressive offers for consumers with high FICO scores. Banks assume you’ll pay your bills on time, rarely run through more than half of your available credit and rack up lots of big-ticket purchases that earn them some tidy fees from merchants.

  • Capital One VentureOne Rewards Credit Card. This souped-up version of the popular Venture card carries no annual fee and a crazy balance transfer offer with no transfer fee.
  • Chase Freedom Visa. Its television ads only slightly exaggerate reality: Chase practically falls over itself trying to give free money to cardholders with excellent credit. This all-purpose card boasts a strong balance transfer offer, plus special cash bonuses and rebate opportunities throughout your first year. If you travel frequently, you might get even more value from a Chase Sapphire Card.

The best credit card offers for excellent credit change often, especially when banks try to poach each other’s high-value clients at the end of each quarter.

Good Credit

Under recently revised credit-scoring algorithms, most consumers fall into the “good” category. That doesn’t have to mean giving up on special perks and rebates, though.

  • Citi Forward Card. The best credit card to apply for in this category rewards customers who pay bills on time with reduction in the annual percentage rate of up to 2%.
  • True Earnings Card from Costco and American Express. If you’re already shopping at Costco, you’re probably pretty sharp with your money. One of the best cash-back credit cards on the market, True Earnings doubles as your Costco membership card. It converts up to 3% of your purchases into vouchers redeemable at the nationwide discount warehouse club.

Now that banks have mostly recovered from the credit crunch, expect to see offers and terms for “good” customer accounts improve.

Fair credit

The best credit cards for fair credit often take into account items that don’t appear on your credit report, like rent payments and some utility bills.

  • Capital One No Hassle Cash Rewards. Capital One doesn’t reserve its best cash-back credit card deals for globetrotters and executives. Even with fair credit, you can apply for a version of the issuer’s popular No Hassle cards that lets you earn up to 2% cash back on purchases.
  • Discover Student More Card. Geared toward young adults with thin credit files, Discover’s card offers a 0% teaser APR and an attractive cash-back reward program.

The best credit-card issuers help customers with fair credit “graduate” to better deals as their credit scores improve.

Poor Credit

Before the Credit CARD Act, a handful of banks earned criticism for predatory lending practices applied to consumers with bad credit. Some issuers offered subprime cards that promised small credit limits, then immediately charged hundreds of dollars in service charges. “Fee harvester” accounts preyed on consumers so desperate to improve their credit scores, they felt obliged to shell out significant monthly payments for credit cards they could barely use. (How long will it take you to pay off your cards? Find out with MSN Money’s calculator.)

But that was then, and this is now. If you’re looking to rebuild your credit with a low-cost card you can actually use, check out these two offerings:

  • Orchard Bank Classic MasterCard. The best credit card for those with bad credit, this MasterCard offers a second chance for consumers who’ve had bad luck or learned some tough lessons. This card offers reasonable terms and fees for cardholders committed to making on-time payments.
  • Public Savings Bank Open Sky Secured Visa Credit Card. Sometimes, it takes a little more to convince banks that you’re ready to handle a line of credit. Public Savings Bank lets you borrow against a secured savings account, up to $3,000. With fair rates and fees, compared with other secured credit cards, Open Sky can help you build the 18- to 24-month track record you’ll need to qualify for traditional credit cards.

The best credit card to have at any given time is the card that gives you the highest possible value for your money. Remember to balance your desire to build a strong credit score with the real costs associated with each credit card you add to your wallet. Keep your spending in check, and use online banking tools to track your purchases and rewards. Review your credit score regularly to make sure your plan is having the intended result.

This article was reported by Joe Taylor Jr. for CardRatings.com.

Study: Bankruptcy Considered or Filed by One in Eight Americans

A study recently published by the web site Find Law indicates that a considerable percentage of the U.S. population (one in eight survey respondents, or nearly 13 percent) has either considered filing for bankruptcy or actually done so.

That figure may seem high, but in a nation of consumer debt, depreciating home values and a limited job market, perhaps it’s no wonder that so many of us are in need of serious the serious financial protection and debt relief that bankruptcy can offer.

Who Is Considering Bankruptcy?

The study breaks down potential bankruptcy filers in part by age:

  • Americans between 35 and 54 are reportedly the group most likely to consider bankruptcy as an option.
  • Americans 18 – 34 and 55 and older are, according to sources, half as likely as the middle age group to consider or actually file for bankruptcy.
  • Senior citizens (those 65 and older) are apparently the least likely group to consider bankruptcy as a debt relief option, at only seven percent.

How Have Bankruptcy Filing Numbers Changed in Recent Years?

Sources indicate that in 2010, 1.5 million Americans actually filed for bankruptcy protection. This number marks the highest annual total since 2005, when the Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA) took effect and tightened the standards for those interested in bankruptcy protection.

Why Do So Many People Need Bankruptcy Protection?

While no two bankruptcy cases are alike, bankruptcy filers often note common triggers that led them to seek the protection of the bankruptcy court. These include:

  • Unexpected medical expenses: Illness and injury can both cause serious medical bills to build up, particularly for those people who are uninsured or underinsured. And even an otherwise happy event, like the birth of a child, can prove very expensive.
  • Change in family makeup: Divorce and death are difficult to deal with on their own, but are often compounded by the financial troubles they cause. Many families are forced to face unpleasant financial realities after divorce or death carries off a primary breadwinner.
  • Job loss or reduction: Even good employees are at risk of losing their jobs in the current economic climate, and even though layoffs have slowed in recent months, the unemployment rate remains high. It’s no secret that this type of financial burden can lead a household to seek bankruptcy protection.
  • Fear of foreclosure: Even those with good health and steady jobs may find themselves unable to keep up with their mortgage, and some families opt to file for bankruptcy in hopes of fending off mortgage foreclosure.

Considering the many factors that can contribute to a household’s decision to file for bankruptcy protection, it may be a wonder that only one in eight Americans has thought about personal bankruptcy!