Personal finance savvy rising, but high credit card debt persists

Americans are more educated about credit than they were before the recession started up; however, their knowledge about personal finance isn’t resulting in better decisions about credit and lending. A survey will tell us that most Americans know the interest rates they are paying on their credit card and they know their credit rating. Even so, they continue to carry high interest credit card debt and many don’t know how to improve their credit scores.

Article Source: Personal finance savvy rising, but high credit card debt persists by Personal Money Store

No good is personal finance know-how

A survey of personal financial knowledge that was done by Harris Interactive on behalf of Lending Club shows that Americans still aren’t making the most of hard-learned instant cash credit lessons learned during the recession. Adults unaware of their credit score came in around 31 percent, compared to the 45 percent who didn’t have a clue in 2007 according to a Bankrate, Inc. survey. Fewer adults (around 22 percent) who use a credit card don’t actually know the interest rate on the credit card they use most often (compared to 29 percent who reported not knowing in 2007, according to a National Foundation for Credit Counseling survey).

Credit card debt seems to prevail

Of those adults who do know the interest rates on their cards, the survey shows 31 percent have an interest rate of 20 percent or more and 64 percent pay 14 percent or more. Although 93 percent of all of the credit card users know it’s possible to negotiate for a better rate, only 29 percent have ever tried to. Although closing a credit card account negatively impacts credit score, 18 percent believe it increases your credit score; 27 percent believed it has no impact. For those with any kind of debt other than a home mortgage, credit card debt is the most common type of debt overall (67 percent) and often the most expensive type of debt to carry.

Advice on personal finances

To gain more knowledge about personal finance, AOL Money Coach Jennifer Openshaw has advice for consumers who want to be smarter when it comes to credit. Find out about your card rates. Find out about all of the lower rates. Somewhere around 68 percent of those who ask for a lower rate are successful and build confidence in their financial savvy as well. Start with a target rate in mind, be assertive and ask for the supervisor if necessary.

Figure out what makes a difference to your credit score

Openshaw makes the suggestion that you learn what affects your credit score. You should know that closing older accounts reduces your balance-to-credit card limit ratio, which may actually lower your score. If you have any kind of trouble controlling your credit card spending, it may be better to take the temporary hit to your score so you have fewer sources of temptation. Finally, you should probably cut your costs on current debt, consider paying off all your debts with one lower interest rate bank loan, but don’t do it on a credit card.

Find more information on this topic

Bankrate Inc.

bankrate.com/

National Foundation for Credit Counseling

nfcc.org/

Jennifer Openshaw

coaches.aol.com/money/jennifer-openshaw