ALEXANDRIA, Va. — Taking advantage of the current holiday season, NCUA Board Chairman JoAnn Johnson has taken the somewhat unusual step of addressing consumers directly about their use of credit cards and card safety.
“As a member of President Bush's Financial Literacy and Education Commission, I recognize the importance of encouraging good, common sense habits when it comes to using credit cards. These are valuable instruments that give consumers more flexibility when it comes to making purchases, but they also carry with them responsibilities that consumers should be aware of, particularly in preventing identity theft,” said Johnson.
Among the practices Johnson urged consumers to adopt were using caution when taking cash advances and reading the fine print in the agreement, particularly since they usually carry higher interest rates. She also suggested paying the maximum amount possible on your credit card balance. Paying the maximum, instead of the minimum, she explained decreases the time it takes to pay off credit card balances, saves money in interest charges, and helps establish a better credit rating.
In addition to prudent use of credit cards, Chairman Johnson also stressed greater consumer awareness as a tool to combat identity theft. Identity theft and other fraudulent use of confidential personal financial information can affect a person's credit, ability to get a job, or own a home. According to a recent survey released by the Federal Trade Commission, 8.3 million American adults were victims of identity theft in 2005.
Johnson suggested consumers safeguard any documents that contain sensitive personal information, including proper disposal and shredding.
She also explained they should read financial and credit card statements as soon as they arrive and look for unauthorized transactions and review their credit reports from all three credit reporting agencies and make certain there are no inaccuracies, annually if possible.
Johnson noted that “financial education is an important first step in helping consumers navigates an increasingly complex financial landscape. I am grateful for the proactive efforts credit unions are making to inform their members about these issues.”
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