I need a new place to live, but I'm worried I won't find an apartment because of the debt on my Capital One card. What can I do? – Charles

Hi Charles,

If I understand your situation and question correctly, it appears that you have a card with which you ran up an unwieldy balance. Now you either want or need to move to another apartment. You're afraid, however, that the debt you currently have is holding you back from being considered an acceptable tenant.

And yes, you'd be right to be concerned. The credit card companies are reporting information about your accounts to the credit reporting bureaus. Many landlords and property managers check these reports to determine if you, a hopeful tenant, would be right for the rental. These documents help them decide if you have been financially responsible in the past, which is certainly relevant to someone expecting rent to be paid in full and on time in the future. If you have paid accounts late, have accounts in collections or owe a judgment, you won't look too attractive. All of those circumstances indicate trouble.

Of course, your debt could have been due to matters that were out of your hands. Perhaps you were laid off and couldn't find another job quickly enough to make sure that your accounts remained in good standing. Unfortunately, to someone renting you a home, even that might be somewhat irrelevant. You're a stranger to them, and your credit report is talking loudly. It's shouting, “I did not pay my bills as I should have,” and that's a massive red flag.

Another warning sign to a landlord would be you simply owing a lot of money. Even if you've been paying your creditors perfectly on time and have kept all your accounts out of collections, an especially large debt can indicate that too much of your paycheck is already promised to others.

For example, let's say you take home $4,000 per month and the rent for the home you want is $1,500. With such an income, it would seem like you'd have enough coming in to pay that, plus expenses, with little trouble. Unless, of course, you are paying a large sum to your credit card companies each month. Maybe your minimum payments alone are $1,500. In that case, you would only have a $1,000 cushion for food, utilities, gas and other necessities. The landlord, therefore, may very well consider you too much of a risk.

So what do you do now? If you have some time before you have to move, great. Use it to delete the debt to a reasonable amount. Your goal should be to afford the rent, credit card payments and all of your expenses with no trouble. This is not just for the landlord's benefit, but for your own peace of mind. You want to be sure that you're not struggling to cover all of your bills each month.

On the other hand, if you're being rejected because of delinquencies and other negative items on your credit reports, prove that the past is in the past. Tell the landlord that you messed up, but you've changed for the better in specific ways. Perhaps you've paid on time for the past six months. Point that out.

If your debt problems occurred because of an event that was out of your control, I also suggest adding a 100-word statement to your file. That statement will appear every time a landlord (or anyone else) pulls your credit report and is your opportunity to describe what happened on paper.

Each of the three credit bureaus has its own policies for adding a personal statement:

Experian

Equifax

TransUnion

Have no good explanation for your money and credit issues? Warn any potential landlords that they may see something they won't like, and ask them to give you a chance anyway. Offering a larger-than-requested security deposit or paying a few months' rent in advance can work wonders.

Some merchants, lenders and service providers still either don't let you pay with a card, or charge a hefty credit card fee that can wipe out your rewards. Here are six things you might not be able to pay for easily with a credit card, plus one trick to (sort of) beat the system:

1. Your digs – Whether you rent or own, you'll probably have a hard time paying for your housing with credit. Most mortgage companies and landlords don't take cards.

“They don't want to get dinged with fees,” says Eric Rosen, managing editor of rewards website ThePointsGuy.com, referring to credit card processing fee of up to 3 percent or more that sellers pay when a customer buys something on credit.

If you're in the market for a new mortgage, it can't hurt to ask a company if you could pay your mortgage with a card.

“You should be shopping around anyway,” Rosen says. “Ask what they're willing to do for you.”

2. Your utility bills – You probably can pay your gas, electric or water bill with a credit card. But many utility companies use third-party automated payment services that charge fees big enough to cancel out your rewards. For example, Con Edison power company in New York uses a company that charges a $4.75 fee to pay by credit card. Georgia Power uses a company that charges $3.60. Unless you have a truly massive bill, it's probably not worth it to use your rewards card. Say you have a $100 bill, and you get a standard 1 percent cash back. You'd be paying at least $3 to get $1 in rewards. But not all companies charge: NW Natural gas company in Oregon, for example, offers free payments by credit card, advertising that customers can earn points.

3. Higher education – It's not as easy as it used to be to pay for college tuition with a credit card, Rosen says. Some schools have stopped accepting cards, and others charge fees to process payments with plastic. However, some colleges and universities still take cards without an added charge.

If you already have a student loan, don't count on paying it off all at once with a card: Some lenders don't accept plastic, and others limit the amount you can pay with a card. The largest U.S. student lender, Sallie Mae, imposes limits on credit card payments.

“To help customers avoid swapping what is usually low-interest student loan debt for higher-interest credit card debt, we limit credit card payments to the monthly amount due rather than the pay-off amount,” says Debby Hohler, Sallie Mae's director of corporate communications.

4. A new car – You've saved up to buy a new car, but you'd like to put the purchase through your credit card to get points. You imagine driving your new Lexus to the airport to catch the flight to Paris that you earned with all those points. It might not be that easy.  Most car dealerships limit the amount you can put on credit cards to $5,000, Rosen says. One ThePointsGuy.com forum member reported that he was able to put $10,000 of the price of a new car on a credit card by making two payments on different dates. His advice: Negotiate the price first so the dealer doesn't figure in credit card processing costs and inflate the price of the car.

5. A gambling spree – If you're planning a hedonistic weekend in Vegas, keep your credit card in your wallet. If you can use your credit card to buy gambling chips at a casino, the transaction typically will be processed as a cash advance. On cash advances, unlike purchases, interest starts accruing immediately, says Greg Meyer, communications manager for Meriwest Credit Union. Plus, the cash advance interest rate usually is higher than the purchase APR, Meyer says. You'll probably be charged a cash advance fee of about 2 percent, too.

“If I'm taking out $1,000, they will charge me $20 right off the bat,” Meyer says. The kicker: some rewards programs don't even give you points for cash advances, he says.

6. A tax bill – Do you owe Uncle Sam? You can pay your tab with a rewards card, but all the companies that process these payments charge “convenience fees” that range from 1.88 percent to 2.35 percent.

“The convenience fee they're charging is really convenient for them, but not for the consumer,” Meyer says. “It does negate any rewards.”

A possible workaround
So, why can't you pay for these items freely and easily with a credit card? It usually comes down to one big reason: The businesses don't want to get stuck with hefty credit card processing fees on large payments, Rosen says. For example, if you pay a $1,000 mortgage payment with a credit card, your mortgage lender could end up paying $30 or $40 to the credit card company. Some companies also claim they're trying to help keep you out of credit card debt. Is that true?

“Very few companies are altruistic,” Rosen says with a laugh.

Now for the good news: If you're determined and willing to do some legwork, there is a workaround. Rosen says. You can get a prepaid card — he recommends the American Express Bluebird, which acts like a debit card and checking account. You can load money onto the card with Vanilla Reloads.

The trick is to find a store that allows you to buy Vanilla Reloads packs with a points-earning credit card. Some CVS locations allow you to use a credit card for the purchase, but you'll have to check to make sure, as some stopped accepting credit cards for reloading purchases. The packs are available at $500 value, and cost $3.95 each. Some stores impose limits on the dollar amount of Vanilla Reloads you can buy each day. And you can only use $5,000 worth of Vanilla Reloads per month.

Once the money is in your account, you can send a check or electronic payment, Rosen says.

Rosen says he uses this method to pay his rent, writing a check from his Bluebird account.

“It's a very useful tool to rack up points on transactions you wouldn't be able to otherwise,” he says.

The truth is that a tanked credit score can cause big trouble in many areas of life, hindering your ability to land a job, find a place to live and even get a date.

Here are eight ways a shaky score can mess up your life — and worst-case-scenario tips for how to cope.

A low credit score can…

1. Make it harder to pay with plastic. Forget whipping out your AmEx Platinum when treating a friend to dinner, booking a hotel room or renting a car. If a low score keeps you from getting a credit card, using a debit card instead can be a hassle, especially when traveling. According to Thrifty car rental, most rental car companies will accept a debit card with a Visa or MasterCard logo, but they might limit your choice of cars to non-luxury models and put a hold of $200 or more on the funds in your bank account.

Hotels also sometimes preauthorize a certain amount on a debit card.

“They're basically freezing your own cash,” says Bruce McClary, director of media relations for ClearPoint Credit Counseling Solutions. “You could run out of money pretty quickly when you might not have expected to.”

So, what should you do? Consider a secured credit card. You'll have to deposit your own cash and often live with a low credit limit. But you'll have a card when you need it, and payments will be reported to credit bureaus, which helps rebuild your credit.

2. Cost you a job. Bad credit can be a vicious cycle: Have bad credit because you're unemployed? Go job hunting only to learn your prospective boss wants to look at your credit report. According to a March 2013 survey by the think tank Demos, one in seven people with problem credit have been told they didn't get a job because of their credit history. Many jobs require credit checks — from high-level executive positions to delivery driver, home care aide and frozen yogurt server jobs, according to Demos.

“They run the gamut,” McClary says, noting that employers might want you to have good credit if you're handling money, if you have access to customers' credit card numbers or if the position requires security clearance.

3. Limit where you can live. Need new digs? You might have a hard time finding an apartment if you have bad credit.

“Virtually all landlords will look into credit,” says Dick Burke, senior vice president and general manager for Apartments.com. That can include managers of a high-rise, luxury apartment complexes or even homeowners renting out their own houses, he says. Bad credit doesn't mean you'll automatically get turned down: A landlord might be more likely to rent to you if your bad credit resulted from a single catastrophe — an illness, a divorce or a death in the family — rather than from a history of late payments, Burke says.

So, what can you do?

“Be upfront and candid,” Burke recommends.

Explain to the landlord what happened and what you're doing to fix your credit, consider getting a letter of recommendation from a previous landlord or lender and be prepared to put down a deposit of four or more months' rent if you can afford to. Or, you might be able to get approved if you can get a creditworthy co-signer, Burke says.

4. Keep utilities off until you pay a deposit. So, you found a place to live. If you want to get your lights, gas and water turned on, it might cost you, says Howard Dvorkin, founder of Consolidated Credit Counseling Services. Utility companies may check your credit before starting service, and if it's bad they might ask you to pay a deposit that could range from $25 to $300 or more. Don't have the money? It might be time to call mom. Some utility companies will accept a letter of guarantee from someone who promises to pay your bill if you don't.

5. Prevent you from getting a cellphone contract. Cellphone carriers typically run your credit before signing you up for a contract, McClary says. But the recent expansion of cellphone options has been a boon to consumers with bad credit, McClary says. Instead of being shut out, they might actually get a better deal, he says.

“If somebody has train-wrecked credit, they can walk into a store and pull one of these pay-as-you-go phones off a shelf,” McClary says. “This could be one scenario where you actually save money.”

6. Make it more costly to buy a car. When you need a new car, you won't be able to just walk into a showroom, pick a ride and get a 0 percent financing deal. Instead, you'll have to make tough choices. Say you want to get a two-year loan to buy a $6,000 used car. If you have a bad FICO score, you might get 25 percent APR and pay up to $1,600 in interest — that's about $1,000 more than a consumer with a good score and a 9.8 percent interest rate would pay.

“The lower your credit score, the worse deal you're going to get,” McClary says. “And in some cases you're going to just get flat-out turned down.”

So, is there anything you can do? Shop around for the best deal you can get within the range of choices you have, McClary recommends. Scrutinize the fine print, crunch numbers and don't let dealers gloss over terms, such as high interest and fees, he says.

“Ask questions, be very vocal, and get things in writing,” McClary says.

7. Raise your insurance rates. When you apply for auto or home insurance, insurers typically check your credit and use it to determine whether to insure you, which policies to offer you and how much you pay, according to the nonprofit advocacy group United Policyholders.  Depending on the insurance company, a policyholder with bad credit could pay anywhere from two to four times the premium of someone with good credit.

8. Put a crimp in your love life. Bad credit can even mess up your shot at romance. Not only is it embarrassing when you go to, say, rent a car with a new flame and get told you have to rent a beige Corolla instead of a red Mercedes because you don't have a credit card. But some daters take good credit very seriously. In fact there's even a dating site, CreditScoreDating.com with the tagline, “Where good credit is sexy.” Users can include their credit scores in their profiles and search potential matches based on their credit scores.

So yes, bad credit can cause problems, but don't despair.

“People don't just wake up one day and have bad credit — something has to happen, whether it's illness, loss of job or poor money management,” Dvorkin says.

There is one way out, he says, and it takes time.

“You have to rebuild your credit,” he says.

My girlfriend confessed to me that she's $15,000 in credit card debt. It was a shock, but I'm trying to be supportive. The first few months after she told me, she was motivated to pay it down and stick to a budget. But now she's getting frustrated and slipping up. So what can I do to support her? What are some things I should say or avoid saying? I want to marry her someday. I won't give up on her. Since you've worked with people who are in debt, I was hoping you could give me some pointers about how to help her. I know there are no magic words to say, but I want to do what I can. – Michael

Dear Michael,

If this person is the woman of your dreams, I say yes, support the heck out of her right now! She's going through a tough time and could use all the cheerleading she can get.

Paying off such a big balance is not easy, and it's normal to get frustrated. Many people start off strong in the beginning, but after budgeting to the hilt and denying all pleasures, even the most committed can become dejected. There are only so many times you can eat ramen noodles before you want to run over to the nearest cafe and order the most delicious, expensive thing on the menu.

You can absolutely help your girlfriend stay on track. Here are a few things that would work for me, if I were in her shoes:

1. Listen and convey understanding. It's so tough to constantly monitor spending, and she's going to get frustrated. Let her talk to you about it. Venting is fine. Crying and yelling is, too, as long as it's not directed at you.
2. Refer her to a credit counselor. Nonprofit credit counseling organizations provide free budget and debt appointments. A counselor can give your girlfriend great pointers on ways she can reduce spending without the agony (perhaps she's been focusing on the wrong things). They may also suggest a debt repayment plan, which can take the burden off of her having to pay separate accounts. They may even be able to reduce her credit card interest rates, so she can get out of debt faster than she is now.
3. Work on the numbers together. Use an online calculator and figure out how quickly she can get out of debt on her own. It's possible that she's being too aggressive with payments. She might feel more motivated to stay the course if she gives herself some slack. Plug in the numbers and run through several options. For example, let's say her initial goal was to be debt free in a year and a half. With an interest rate of 17 percent, she'd need to send about $950 a month. That might be unrealistic, so extend the time frame and lower the payment.
4. Inspire her to get a better-paying job. This is a big one. Too often, people focus so much on paring their budget to the bone, and what they really need to do is make more money. If your girlfriend is working part-time, encourage her to take on full-time work or earn extra cash in creative ways like tutoring or pet sitting.
5. Splurge on her. If I were in her place, I would never want someone to pay off my debt for me (pride, you know). But being treated to a swank meal every once in a while? Yes please! If you can treat her, do so. It can help her feel human and I'm sure she'd be grateful.

With encouragement, compassion and the occasional lobster dinner, your girlfriend should be able to meet her debt-deletion goal. Just as important, she'll know you had her back during a long rough spot.

Got a question for Erica? Send her an email.

I've taken credit cards abroad with me a few times, and some places ask me if I want to pay in euros (or whatever the local currency is) or in dollars. I don't know if one is better or worse than the other, or if there are costs involved, so I've always just paid in euros. But should I take the chance to pay in dollars? Are there any fees or ways it'll cost me in either case? – Linda

Dear Linda,

It may seem like a great convenience to pay credit card charges in dollars when traveling abroad, so you can track how much you've spent without constantly doing currency conversions in your head. But indeed, as you suspect, there are downsides.

The technical term for the automatic conversion of foreign currency charges into dollars at the check-out counter is dynamic currency conversion (DCC), and it's convenient, because the final amount is rung up in U.S. dollars at the point of sale. But there's one big difference between the conversion rates used in DCC and the rates used when paying in the local currency: The exchange rate used in DCC is not necessarily the prevailing interbank rate, but rather a rate set by the merchant.

As you might suspect, many merchants take advantage of this slight difference to pad the exchange rate in their favor. Exactly how much more you'll pay varies. Generally, the conversion rate will be 3 percent above the current exchange rate, but it could be higher.

Paying in the local currency won't always be free either — your bank may charge you a foreign transaction fee (generally a percentage of the transaction amount) for overseas transactions). However, that percentage may very well be lower than the rate the merchant charges for DCC. Assuming it is, you're better off paying in the local currency and paying the foreign transaction fee to your bank. Plus, although the costs of DCC may vary unpredictably by merchant, the foreign transaction fee your bank charges will not fluctuate.

Fortunately, you can avoid DCC. If a merchant is charging you in dollars or offering to convert the purchase into dollars, simply refuse and ask to be charged in the local currency. Not all vendors may ask, so check the receipt. If it shows only a dollar amount, that means that the merchant is using DCC. If this happens, ask for the purchase to voided and rung up again in the local currency. This will ensure that the transaction is converted by Visa or MasterCard using the current interbank exchange rate. The credit card networks require merchants to give consumers the right to refuse DCC.  If the merchant won't cooperate, and has already charged your card, you'll have to dispute the charge with your issuer.

It's also getting easier to avoid paying foreign transaction fees on overseas charges. More and more card issuers are waiving the fee on all or some of their credit cards. Capital One has no foreign transaction fees on any of its credit cards. Discover has eliminated foreign transaction fees on its Discover It card, and other card issuers offer select credit cards without the fee. If you are in doubt, simply call your card issuer and ask if the fee applies to the cards you carry.

For the savvy consumer, it's fairly easy to stay clear of the extra fees. Traveling is expensive enough as it is, so why pay unnecessary surcharges for the pleasure of using your credit cards overseas?

Got a question for Eva? Send her an email.

Is it safe to email or text credit card information? I want to buy some electronic items from a friend with a connection to a great deal. He said I have to send my credit card numbers and all of my personal information associated with the card, and he'll order it for me and have it sent to my billing address. Is this safe? He said he can get me a 20 percent discount on stuff that never goes on sale, but I'm still uneasy about it. – June

Hi June,

My first reaction to your letter is to respond with a firm “No way, don't do it!” There is something that seems intrinsically risky about sending personal credit card data via email or text message.

Or is it? I admit that I'm a little paranoid about credit card and other personal data zipping around electronically. Therefore, I asked my friend and famed identity theft expert Robert Siciliano what he thinks. If anyone is cognizant about the dangers of these types of transactions, he is. And I must say I was surprised by his response.

“I email credit card information all the time,” says Siciliano. OK, but is it safe? “It's definitely safer than handing over your credit card number to any store clerk or waiter.”

Think about it, June. Each time you give a credit card to someone you don't know — and who then takes it out of your range of vision — anything can happen. That person can copy the numbers imprinted on it and create a dummy card that he can use to swipe at a store. Or he can use the digits alone to shop online, with the items delivered to a new address. These things don't happen all the time, but they do happen.

Although the risks of texting or emailing your credit information are minimal, you must take care to pay close attention to your credit card statements after you share your credit card information with another person.

This I totally agree with. If your friend uses your credit card information to pay for things that he's not supposed to, he's committing fraud. You can dispute those charges with your credit card company. Consumer laws are powerful, and in most cases unauthorized charges are not the responsibility of you, the cardholder. As long as you report the crime quickly, whatever the person spent illegally should be reimbursed to your card. The Fair Credit Billing Act limits your losses to $50 if someone uses your credit card information to make purchases without your permission. You would have to go through a rigmarole, though. That would include contacting the police to file a report and flagging your credit report for fraud.

I want you to pay close attention to what your gut is saying. Perhaps you feel uneasy because you don't know this friend very well, or you do, and he's got a checkered past. While you probably won't be held responsible for debts you didn't incur, you could be opening yourself up to unnecessary trouble. You can't put a price on aggravation and betrayal.

Before placing your order and hitting “send,” weigh the money you'll save with the discount to the possible time spent working out problems if your buddy decides to take your plastic for a joyride.

Got a question for Erica? Send her an email.

We asked five personal finance experts and bloggers to share their stories of their first credit card. Although they may be dolling out money wisdom today, most of them acquired it the hard way. Here's what they learned — and what you can learn from them.

The cost of fun
Jana Lynch, blogger at Daily Money Shot

Lynch got her first credit card when she was 18 and a freshman in college.

“I got the credit card because, A) I could; B) who didn't want the free T-shirt?; and, C) it made me feel grown up,” Lynch says.

Lynch used her card throughout college to fund fun for herself and her friends.

“I used it however I wanted,” she says. “In college, it was fun to throw down the plastic and have people give you the cash for their part — it was like free money!”

Unfortunately she didn't put that cash aside to pay the bill each month. By the time she finished grad school, the balance was about $8,000.

“I didn't know the price of not paying it off every month,” Lynch says. “I figured minimum payments were enough.”

Lynch calls the card her “gateway card,” the first of many on which she ran up balances. When she married, her husband had debt as well. It took them five years to pay off their cards.

Today, Lynch no longer uses credit cards.

“I learned my lesson the first time; no credit cards, no debt. For me at least,” she says. “There are plenty of people who can use credit responsibly. I don't think I'm one of them.”

Advice for first timers: Lynch recommends studying up on credit. Personal finance blogs — and your card's terms and conditions — are good places to start.

“Most importantly, only get a card if you feel you can be careful and responsible with it,” Lynch says. “Don't do it just because you can. Don't get suckered in by rewards points or a free T-shirt. It's not worth it.”

Credit-wise beyond his years
Scott Gamm, founder of HelpSaveMyDollars; author of “More Money, Please: The Financial Secrets You Never Learned in School”

Gamm used his first card with care. After using cash during his first year in college, he applied for a credit card primarily to begin building a good credit history. His main requirement was that the card have no annual fee.

“I think that for your first credit card, rewards aren't something that should be on your mind,” he says. “If they are, you'll be tempted to use it for everything just to rack up rewards points, so it will end up costing you more money if you don't pay off the balance in full and get charged interest.”

Today, Gamm limits his credit card usage to manageable amounts so he can pay his balance in full every month. His occasional credit card splurges are ice cream and coffee, not big-ticket items.

Advice for first timers: Gamm advises new cardholders to track their cards online and set up reminders on their cellphones so they'll remember to pay their bills.

“Make sure you always pay in full,” he says. “Do anything you have to do to avoid those interest charges.”

An expensive misunderstanding
David C. Jones, Ph.D., president of the Association of Independent Consumer Credit Counseling Agencies

Jones got his first card — an American Express — in 1970 after receiving a solicitation.

“I thought it would be prestigious to have one,” Jones recalls. “I was about as financially ignorant as you could imagine.”

What he didn't know was that American Express charge cards require that the balance be paid off in full every month. Carrying balances forward is not allowed.

“I got myself in trouble very quickly,” Jones says. “I remember the first things I bought were leather coats with a shearling lining for my wife and me. I paid too much for them.”

Advice for first timers: Jones suggests starting with a prepaid card to learn how to budget and use cards responsibly. When you do get a credit card or charge card, read the agreement carefully.

“The biggest mistake that people make is not understanding what they're signing up for,” Jones says.

Pushing her credit limit
Carrie Smith, blogger at Careful Cents

Smith got her first card when she was 18. It had a credit limit of $500, and that low ceiling was probably a good thing.

“Within two months or so I had maxed out the card. I was making a really small salary so it took me about six months to pay down that $500,” Smith says.

The experience taught her that what you can afford is a more important benchmark than your credit limit.

“To this day, I always remember how much I can pay off in a month and don't go over that amount,” Smith says.

Advice for first timers: Smith advises credit newcomers to think of credit cards as short-term loans.

“You can't think of it as an extension of your spending limits or spending capabilities,” Smith says. “It's something that you're going to have to pay back, and there are very high consequences of interest if you don't pay it very quickly.”

Paying for his mistakes — with interest
Anthony Mazzocchi, blogger at We Only Do This Once, executive director at Kinhaven Music School

The only advice Anthony Mazzocchi's parents gave him about credit cards was not to get one. But that didn't stop him from getting one on his college campus when he was 18.

“There was a table set up where they were offering credit cards aligned to your favorite sports team,” Mazzocchi says. “They were handing them out like candy.”

Mazzocchi's first purchase was a video game system, and, for the next 18 years, he carried a balance and paid interest.

“I would venture to say I might have still been paying for that video game system until two years ago,” Mazzocchi says.

Eventually he realized he was making a lot of money but was still broke because of all his bills. It took him two years to pay off the eight cards he acquired and end the cycle of debt that started with his first card. He no longer uses credit cards.

Advice for first timers: Mazzocchi is already educating his own kids about money matters.

“You have to know how credit cards work, but it's a little more about how personal finance works and budgeting, and how credit cards play into that,” he says.

Mazzocchi suggests tracking your spending habits for a month before applying for a card.

“Then decide very systematically how you're going to use a credit card to your advantage and why you are going to use it for something that you could use cash for,” he says.

My daughter's life got messed up in her divorce. She co-signed some loans (totaling more than $15,000) with her dirt-bag of an ex-husband, so she can't get loans and credit cards she needs to get her life back in order. She didn't have a job when he left her and is still looking. I want to help her, but my wife has a problem with me just giving her money, so I was wondering the ways I could help her out credit-wise. Would you recommend I share a card with her in some way? Would my good credit help boost her bad credit? Would her bad credit affect mine in any way? – Raymond

Hi Raymond,

It would be so wonderful if we could go back in time to change not just our own past mistakes, but also those of our loved ones. Your daughter made a bad decision, yet how was she to know? She not only married the wrong man, but co-signed loans with him. Regrettable decisions, to be sure.

Most of the time, joint credit arrangements between spouses, whether for loans or credit cards, work out just fine. As long as both people treat the accounts well, all parties benefit. The bank reports the positive activity to the credit bureaus, and that activity is then recorded on the credit reports of each owner.

However, sometimes, all does not go according to plan. For example, the person who was expected to manage the account fails to do so and the loan goes delinquent. Does the lender care which rightful owner messed up? Not at all. As far as they're concerned, the amount owed was either paid or not paid, and each owner is 100 percent liable. The negative information will show up on and cause damage to both people's credit reports.

If the lender chooses to sue for the unpaid debt, it may drag one or both of the account owners to court. The divorce is irrelevant. If your daughter signed the contract, she's equally and permanently responsible for the money owed.

So how can you help your daughter now? You could co-sign a new loan or credit card for her. Her credit reports and scores would improve with positive use of that account.. And no, her credit history will not transfer to your credit reports, but the payment history on a co-signed card with you will.

Still, I don't recommend it. You would put your good name and finances on the line. As you can see from what your daughter has just been though, joint ownership is risky. By sharing an account with her, you lose control. I'm not implying that she will charge the card up and then not pay, but that it's a possibility — and a gamble. And if she were to do such a thing, you'd be held accountable, and your credit rating would sink if the situation really went south.

From what I see, you have three better options:

1. Be the lender. While I'm not usually in favor of a parent acting like a bank, if you believe that your daughter will pay you back, you could offer her a loan so she could get back on her feet. I understand that your wife objects, but if your daughter were to secure the loan with something of value, it could give confidence that the money would be repaid.
2. Be a benefactor. You could just gift your daughter a specific sum and be done with it. With a cash grant, she could repay the bad loans left by her ex, which will help her credit.
3. Be the parent. Lastly, you can just say you're sorry, but she'll need to figure her own way out of this mess. You'll support her emotionally, but not financially.

The direction you choose ought to be based on your father-daughter relationship, your knowledge about her character — and, hopefully, a healthy amount of caution about sharing credit.

Got a question for Erica? Send her an email.

I am trying to get off the balance transfer merry-go-round. I have $12,000 in card debt. The highest APR is 23.99 percent with Sears, but that balance is below $1,000. The rest of the debt is on low-interest cards at about 11.99 percent and under. Once my CD matures in December, I can pay all my debt, but I have done this many, many times before and just wind up using the cards again. Only this time I am not working anymore. I live on Social Security income.

Keeping my eight cards keeps me kind of “in line,” believe it or not. I would be spending more if my cards had no balances. I'm the type who likes to use plastic. I live in denial and would rather foolishly pay interest each month rather than pay them all off — been there done that. There is a ton of info out there to tell you what to do, but none truly addresses the issue of the denial part. Any suggestions? – Lola

Dear Lola,

Denial works OK when you have enough income to pay your credit card balances down once they get too high. But on a Social Security income, you won't have that luxury. If that credit card debt gets ahead of you, you could easily find yourself buried.

To see how your current credit management strategy will pan out, let's say you pay off your credit card debt when your CD matures. Then — repeating your current financial habits — you rack up another $12,000 in debt. Now the CD is gone, and you're stuck having to pay down the $12,000 credit card debt on your Social Security income.

As your credit card balances head up, your credit score heads south, and you are likely to find it harder to qualify for decent balance transfer offers. So you could end up paying interest rates at the higher end of the spectrum. At 22.9 percent APR, interest charges alone will eat up $230 of your Social Security income every month.

Toss in a couple unexpected expenses such as medical emergencies, a family crisis or car repairs, and you'll find yourself trapped by debt obligations, with no way out. Once you fall short of funds and miss payments, the debt collection machine will descend upon you, and trust me, with debt collectors after you, denial is not an option.

Maybe all that sounds gloomy. But, as you enter your golden years, planning for the unexpected should be the rule rather than the exception. So I'll share a few tips to help you get off this not-so-merry-go-round of debt.

1. Take time for self-reflection. When you get the impulse to spend more than you have, pause to look at the underlying emotional drivers. Is your spending a reaction to emotions that are hard to deal with? Or to boredom? Does it come from a need to treat yourself to cheer up? From sheer habit? Or all of the above? Understanding the impulses that drive your spending is an important first step in dealing with it.

2. Make it fun. There are a lot of smart people out there who have come up with all sorts of fun resources for tackling the challenges associated with changing bad habits — including poor money management habits.

Check out the resources on HabitChanger.com, a site that uses cognitive behavior therapy to give you a new perspective by exposing the habits you've learned through your family or on your own. For about $20 (far below what you pay in credit card interest each month), you can join one of its 42-day programs. Another good habit-changing resource is First30days.com, which has programs targeting debt reduction.

3. Create an emergency fund. Contrary to what you might think, your best bet is not to simply wipe out the debt once your CD matures. If that is all the savings you have (and it sounds like it), you'll need to keep that money in an emergency savings account for unexpected expenses. Having a little extra padding is essential to prevent yourself from reaching for your cards in an emergency.

4. Get a coach. Getting a coach who is on your side can make all the difference between succeeding or failing. Look for a good nonprofit credit counseling organization, and see which free services it offers. It's always better to get assistance before you actually need it, and credit counselors offer financial education and advice in addition to actual credit counseling. Experienced credit counselors who have worked with a lot of people with similar issues can be surprisingly resourceful in helping you free up money for debt repayment.

Paying down debt can be a slog — but it can also be an adventure in self-discovery, learning and growth. So stick with it, and a year from now, you will be happy you did.

Got a question for Eva? Send her an email.