Credit Cards Comparison: Apply and Compare Credit Cards with the Best

Ambiguity in Credit Card Rules Removed

Admin — Thu, 31 Mar 2011 00:00:00 GMT

The extensive legislative reforms enacted the previous year were aimed at protecting consumers from the deceptive practices of the credit card industry. However, many credit card issuers were able to immediately find ways the side step such regulations. As a result, the Federal Reserve has moved to clarify such ambiguity in the credit card rules that allow these companies to elude the regulations. The Federal Reserve approved such amendments Friday and the changes are expected to go into effect on October 1.

Some of the expected changes from the Federal Reserve are listed below.

Original Rule: Card issuers must consider an applicant’s ability to repay debt before approving new or higher credit lines.

Amended Rule: Banks cannot request “household income” on card applications to assess a consumer’s ability to pay. The Fed says the term is too vague and doesn’t accurately reflect the applicant’s financial standing. Instead, issuers must consider the applicant’s individual income or salary.

Original Rule: fees charged in the first year of the account are capped at 25% of the credit line. After that, there is no cap on fees.

Amended Rule: Any application fee or other charges a consumer is required to pay before an account is opened counts toward the limit on first-year fees.

Original Rule: Card issuers cannot hike or revoke promotional interest rates.

Amended Rule: The same rule applies to the waiver of interest charges. For example, a card issuer may now promise a promotional waiver for 70% of interest charges during an introductory period. The Fed says such waivers can’t be revoked unless the account becomes more than 60 days delinquent.

Weekly Credit Card News March 2011

Admin — Thu, 31 Mar 2011 00:00:00 GMT

Recent bills were aimed at postponing swipe fee regulations. Weeks of lobbying from the credit card industry has resulted in lawmakers from both parties to delay a controversial law that would reduce swipe fees. The proposed legislation would mandate a government study of interchange fees and require the Federal Reserve to amend legislations that will reduce these fees by as much as seventy percent. The new rules were supposed to be enacted by July 21. The Senate measure would delay the implementation of the law for as much as two years. The version in the House called for a one-year delay.

With tax day a mere one month away, people are starting to get nervous with thoughts of submitting their returns. It is also the same time credit card companies promote the use of credit cards as a convenient way to pay their tax bills. Though it may be handy, doing so is certainly not without its costs. The IRS is also promoting the advantages of paying for taxes using a credit card. Their website promotes credit cards as a convenient, safe and secure way to pay for their taxes. The IRS also reminded individuals that doing so is a good way to earn miles, points, and cash back from their credit card rewards program. Credit card payments to the IRS go through a third part provider that charges a processing fee as high as four percent.

In response to growing federal regulations in the credit card industry, Chase is contemplating the idea of setting a limit on their debit card purchases. A maximum of fifty to a hundred dollar limit is under consideration. Limitations on charge fees for debit cards have promoted the capping of purchases. In accordance to information provided by the Federal Reserve, debit card transactions accounts for approximately thirty-five percent of all noncash transactions.

Colleges Still Avoid Credit Card Payments

Admin — Thu, 31 Mar 2011 00:00:00 GMT

A majority of universities still frown upon students using credit cards to pay for their tuition due to high handling fees. This is still true even though the government has recently passed legislation that will allow college students to pay tuition with their credit cards.

Based on information for the credit card industry, forty-eight colleges nationwide currently allow their students to pay for tuition using their credit cards. Nineteen additional colleges are expected to follow later this year.

Several credit cards are accepted including ones issued by Shinhan, KB Kookmin, Hyundai, and Samsung. BC Card ranked first in acceptance among colleges, while Samsung ranked second.

However, the number of universities that accepts credit cards for tuition still only accounts for less than twelve percent of the 411 colleges in the country. Last December, the government had introduced an initiative to encourage more colleges to accept credit cards as payment to allow students more options in funding their education. Unfortunately, widespread acceptance is still hindered by the high handling fee of 1.5 percent that is collected from colleges. Based on the average tuition for college students in Korea, the handling fees can cost the schools several hundred million won each year.

Many critics feels the colleges are not trying hard enough to bargain for lower handling fees. A representative for a nonprofit organization dealing with rising tuition prices, Ahn Jingeol coomented, "Universities such as Yonsei University have successfully struck deals with card firms to pay little, if any, of the handling fees."

YMCA Seoul added that, "High handling fees are not a viable defense as colleges often receive large donations from their main creditor banks."

Lower Credit Card Interest Rates

Admin — Thu, 31 Mar 2011 00:00:00 GMT

Thanks to part of the credit card reform law that requires credit card companies to review any rate increases imposed since January of 2009, banks are reducing interest rates for some of their cardholders.

This may not seem like the case since the Federal Reserve reported in increase in average interest rates from 13.57 percent in 2008 to 14.31 percent in 2009. However, chief executive of Cardhub.com, Odysseas Papadimitriou said, "most consumers believe that it was the new credit card law that caused the higher rates, but it was completely because of the economy." Based on his estimates, somewhere between 91 and 121 million credit cards had their interest rates increased due to the recession.

It is still not apparent the number of cardholders who will see their interest rates reduced due to the new regulations. Many cardholders may not have improved their spending and payment habits so therefore should not expect any reductions. Additionally, the credit-reporting agency TransUnion suggested the number of individuals carrying credit cards decreased by eight million in 2010. Even so, millions are expected to benefit from the changes.

The nation's second largest credit card issuer, Bank of America Corp., expects a reduction in rates for approximately one million of its customers. Other larger credit card companies like JPMorgan Chase, Citgroup, Captial One, Discover, and American Express refused to release any specific information in the projected number of cards that will be impacted.

Whether or not the bank will decrease interest rates on a specific account may be influenced by the fact that regulations prohibit increasing rates in the near future without proper notification to the cardholder. In addition, new rates cannot be applied to previous purchases and consumers will have the option to close the account after their previous balance has been paid off.

Even with these circumstances, individuals who carry a credit card balance will see significant savings with their interest rates reduced even slightly.

Minimum Credit Card Sales Implemented

Admin — Thu, 31 Mar 2011 00:00:00 GMT

It is fairly common for one to enter a small store where the owners have a sign near the register which requires a minimum purchase if you decide to use a credit card as payment. Tough this is ordinary with smaller shops; the practice is actually in violation of agreements between the merchants and credit card processing companies. This is no longer the case.

Recently enacted federal consumer protection laws aimed to regulate banks, debit card companies, and credit card companies have brought about a great many changes to the industry. One of the changes includes allowing merchants to set a ten-dollar minimum purchase requirement if the customer chooses to pay with a credit card. This can be done legally by the merchant as long as they do not discriminate against one card over another.

Another change implemented by the government has to do with overdraft protection. Banks typically persuade their customers to enroll in such programs to increase profits. They are so diligent in promoting these services that an approximate seventy percent of customers do opt in to these overdraft protection services. The problem is that a majority of consumers do not even know they have been enrolled in one. Overdraft protection can be a costly program and the new rules prohibit credit card companies to have their customers opt in to these services by default. Customers would now have to voluntarily choose to opt in if they require the services.

Credit Card Minimums Increased to Promote Better Financial Practices

Admin — Thu, 31 Mar 2011 00:00:00 GMT

Canada's sixth largest financial institution in deposits, Desjardins Financial Group prepares to increase the credit card minimum monthly payments from three percent to five percent. The change is Desjardins most recent attempt to promote good financial practices from its customers.

The larger six banks typically charges approximately two to three percent on unsettled credit card balances. Desjardins was one of the first of the large banks in Canada to increase the minimum monthly payment.

The Montreal cooperative is holding their yearly general meetings in Quebec City this coming weekend. Desjardins is hoping to change today's credit practices by promoting the value of saving and financial responsibility.

New Credit Card Rules Promote Smarter Users

Admin — Thu, 31 Mar 2011 00:00:00 GMT

Newly proposed government legislations hope to give consumers a better idea of the costs of using a credit card before applying. This information includes the exact credit line and interest rate that is currently only provided after the application has been processed. The assistant director for card markets for the Consumer Financial Protection Bureau, David Siberman believes the upfront information will help consumers make a more educated decision in choosing a credit card most suited to their lifestyle.

Siberman said, "When the costs and risks of a credit card are clear, consumers generally will make wise decisions about borrowing."

Although the Consumer Financial Protection Bureau cannot limit consumer's use of credit cards nor control their interest rates, several changes are planned to keep them more informed about their debt and credit card policies. Along with the early disclosure of interest rates and credit lines, the bureau plans to augment the way rates and fees are displayed in credit card solicitations. In addition, more regulations clarifying legal disclosures are in the works.

Such changes are an extension to new credit card regulations that went into effect the previous year. These regulations mandated that monthly statements include additional information involving the pay off the accounts. Card issuers must now show how long it would take to pay off a debt while only making minimum payments, how much interest would be paid over a certain period, and how much a cardholder must pay to be debt free in three years. Data provided by academics, regulators, credit bureaus were used to determine what changes were necessary to keep consumers more informed.

Early data shows the changes are helping consumers with managing their debt. A phone survey conducted by market research firm Synovate showed that approximately a third of the respondents noticed the changes on their bills, made larger monthly payments, and used their credit cards less frequently. The same number of respondents also said the rules made it simpler to make their payments on time.

Myth of A Prepaid Credit Card

Admin — Thu, 31 Mar 2011 00:00:00 GMT

Prepaid credit cards are an actual myth. The term is inherently flawed and there are currently no prepaid credit cards available that gives consumers a line of credit. Even so, the term "prepaid credit cards" are more commonly searched for online compared to "prepaid card".

What many people fail to understand is that prepaid cards are not credit cards nor are they debit cards as well. Prepaid cards are simply an alternative to an individual's own checking account. With prepaid cards, consumers load money at various locations, make purchases, withdraw money from ATMS, pay bills, and even deposit their paychecks.

User should know that prepaid cards would never report their transactions to a major credit bureau nor provide them with a line of credit. Even though a true prepaid / credit card hybrid is nonexistent, a great number of talk about this card is apparent. Prepaid card companies actually play a vital role in dispersing the idea of a prepaid credit card in order to make their products seem more attractive.

Prepaid cards can generally be obtained without any approval process nor a initial deposit. Add to this and ability to rebuild credit and a potential line of credit, and prepaid credit cards seem ideal for those with limited or less than perfect credit. When individuals take into consideration the high security deposits required with secured credit cards, prepaid credit cards seems even more attractive. For this reason, prepaid card issuers typically refer to their products as prepaid credit cards. This gives potential customers the false hope that they are applying for something which is a hybrid between a credit card and a prepaid card. Consumers should know that such a card does not exist.

Credit Card Rewards and Their Worth

Admin — Thu, 31 Mar 2011 00:00:00 GMT

No longer are credit cards just another source of funds. Generous and diverse reward programs are now a major consideration factor in applying for a credit card. However, are these reward programs actually beneficial?

A reward credit card will provide points every time a cardholder uses the card. In turn, these points can be exchanged discounts, airline flights, or even cash.

Though the benefits may seem attractive, most reward based credit cards do not come with competitive interest rates. High interest rates may offset any value the rewards given and is the fundamental problem with reward cards.

Head of banking at moneysupermarket.com, Kevin Mountford commented, "Anyone going down the rewards route needs to understand that interest rates on these cards can be quite high, so customers unable to repay their debt in full each month should consider an alternative product, as any interest charged will always negate the value of the rewards, even on the most generous schemes."

Another bit of advice comes from Chris Griffiths who is the head of credit cards at Confused.com. Chris says, "Using a reward based credit card to pay for everyday essentials, instead of a debit card, offers consumers a way to earn some rewards from using their credit card. However, customers should consider how and where they will use the card to maximize the benefits offered and which type of reward will suit them best."

Generally, reward cards should only be considered and used by those individuals who can pay off their balances every month. To take full advantage of these reward programs, it may be ideal to concentrate all their spending onto a single credit card account. Scattering transactions among different cards will result in a longer time before enough points can be accumulated to get something meaningful.

Andrew Hagger at Moneynet.co.uk said it best when he added, "You are never going to earn a life changing amount from rewards or cash back cards, but if you always clear your card statement every month without fail, then it makes sense to get something back in return for your custom."

How to Take Advantage of Credit Card Balance Transfers

Admin — Thu, 31 Mar 2011 00:00:00 GMT

Credit card balance transfers can help individuals better manage their debt. Balance transfer offers allow debt holders to transfer their standing debt to an account with better measures. Before applying for a balance transfer offer, one should make sure the second card provider allows such actions and that the newer card has a high enough credit limit for you to transfer the complete balance.

Balance transfers are typically offered to consumers in the form of balance transfer checks. These checks can be used to make payments on existing credit card accounts. Once the checks are cleared, the amount is accumulated to your new credit card balance.

Even thought the card provider may have already sent you the balance transfer checks in the mail, using them are still subject to approval by the company. Various fees are also typically implemented to the credit card balance transfer offer. These fees usually amount to approximately five percent of the balance being transferred. Administration fees may also be added to some offers as well.

A majority of individuals use balance transfer offers to take advantage of low introductory interest rates. The promotional offers typically last for twelve months so it is important for individuals to plan to pay off the debt within this time. After the promotional interest rate is over, drastic increases may be implemented.

Variable or Fix Rate Credit Cards

Admin — Tue, 29 Mar 2011 00:00:00 GMT

Credit card deals consisting of low variable interest rates are often available. Though these rates may seem attractive, are they a good choice?

To make an educated decision, one should understand the fundamental difference between variable and fixed rate credit cards. Fix rates basically remains unchanged. New government regulations forbid credit card issuers to increase fixed interest rates on new purchases during the first year a credit card is issued. After the initial year, credit card companies must give cardholders a forty-five day notice before making any changes to the interest rates. The new credit card laws also rule out increasing fixed interest rates on existing balances, unless a cardholder is more than sixty days late on their payments.

Variable rates are simply as the name implies. These rates are based on a changing index that can be unpredictable. The best economists in the world will not be able to tell you what the prime rate will be the following year. Before applying for a variable rate credit card, one should ask themselves a few questions.

First, consumers should find out what the credit card rate index is based on. Variable rate cards are typically based on the prime rate. After the index is found, determine its performance and current rate. Secondly, find out the amount the credit card issuer adds to the index. This is known as the rate margin. Next, determine the frequency in which the rates change. Finally, the most important question is to ask yourself how important certainty is to your financial situation. If an individual plans to carry a balance from month to month, a fixed rate card might be more beneficial for budgeting purposes. On the other hand, those who can handle a bit of financial uncertainty can take advantage of the lower interest rates variable credit cards have to offer.

Capped Charges and the Credit Card Industry

Admin — Tue, 29 Mar 2011 00:00:00 GMT

Critics of the congressional proposal to cap interest rates and credit card charges claims will have profound negative influences the industry. The credit card companies suggest such proposals will result in the possible closure of all credit card businesses in the country.

Both the Credit Card Association of the Philippines (CCAP) and the Bankers Association of the Philippines (BAP) submitted papers to the House committee that suggested the absolute cap on credit card companies may mean that these businesses will no longer be viable.

President of BAP, Aurelio R. Montinola III claims setting a maximum interest rate would force credit card companies to close their operations. He also stressed the benefits consumers get when using credit cards for daily purchases or high-priced items. He added, "If the situation specifically requires cash payment, instant cash is available to credit card holders through cash advances."

CCAP president, Simon A. Calasanz said, "A credit card company is first and foremost a business. As such, it has to make a significant investment on infrastructure, systems, manpower and the like before it can realize a profit." Calasanz believes that limiting fees and interest rates will prolong the time needed to recover investments in new technology and developments. "At worst, capping interest rates will make the investment unrecoverable. This situation will eventually lead the credit card company to cease their operations and close shop," he added.

"It takes years before a credit card company recovers its investments through the interest rates that it places on the credit card."

Calasanz also believes the rulings will have negative impacts on consumers as well. He explained, "The consumers who use cards for convenience like international spending, zero interest installment plans, and online transactions will be deprived of these facilities and benefits," Calasanz further said. "Should card companies cease to grant credit, the 30 to 35 percent of consumer spending in retail outlets is automatically put in jeopardy," he said.

Unique Options for Your Credit Cards

Admin — Tue, 29 Mar 2011 00:00:00 GMT

Credit cards are growing more and more personalized. Increasing in popularity are various options for cardholders to customize their spending ability. A number of credit card companies are also offering an assortment of designs for their cards, which is a welcomed alternative to solid colored cards. There are even card companies that allow you to design your own credit card with personal graphics and photos of your choice. As the technology continues to advance, more and more customization and personalization options are available to cardholders.

The opportunity to customize credit cards allows consumers to personalize their credit cards and builds brand loyalty for the issuing bank. An assortment of stock images gives cardholders a diverse choice of cartoon characters, patriotic scenes, and picturesque landscape.

Consumers looking to customize the look of their credit card might not have to sign up for a new one if they do not want to. CreditCovers are available as skins for a credit or debit card, which allows cardholders to express their design and style without permanently defacing the card. CreditCovers offers images that can be adhered to the plastic credit cards while still allowing it to be easily removed if necessary. The credit card skins allow the cardholder's name and credit card number to show while covering the rest of the card with a design of choice. Various patterns are available to an spectrum of tastes and style. The cards even retain its swiping ability for ATMs.

Ideal Emergency Credit Cards

Admin — Tue, 29 Mar 2011 00:00:00 GMT

It is sometimes customary for individuals to have two additional credit cards used for emergency backups. This is more important when traveling. Users wanting to restrict their spending with debit cards or cash typically carry two credit cards for emergency situations as well.

With new debit card regulations limiting purchases at fifty or one hundred dollars per transaction, there might be more reasons to sign up for credit cards as well. These regulations will require consumers to use an ATM, write a check, or use a credit card for any purchases over a designated limit. Credit cards are no longer just for travel or unexpected frozen debit cards flagged for possible fraudulent activities.

Using credit cards can also have their benefits as well. A good hotel credit card can earn free stays at your favorite hotel brand along with being a back-up card. Airline credit cards allow you to earn free flights and bonus miles by simply applying for one. Cash back cards are ideal for those who prefer a more direct cash back rewards. Cash back cards can earn you one percent or more off every purchase.

Credit Card Holders Look For More Cash Back Rewards

Admin — Tue, 29 Mar 2011 00:00:00 GMT

It is more apparent at current times that consumers are looking to get the most out of their credit cards. With this in mind, cash back rewards programs have greatly increased in popularity. A recent survey conducted by Bankrate.com offered some interesting information on cash back credit cards as well as provide resources and tools that help consumers decide on a credit card.

The survey found that one percent of cash back continues to be the fundamental start from which comparisons should be made. Approximately forty-four percent of the surveyed credit cards have a one percent payout, which begins with the first spending dollar. The survey also concluded the frequency of introductory bonus offers. Nearly forty-one percent of credit cards have these bonus offers while the numbers are expected to rise. Categorized payouts are also a fairly common offering. Approximately twenty-eight percent of the cards surveyed included higher rewards for particular categories such as travel, groceries, and gasoline. It is typical for most cards to have no expiration date for their rewards. Only about half the cards have an expiration date, which was usually around five years.

Greg McBride, Bankrate's Senior Financial Analyst said, "Cash-back credit cards represent a way for disciplined consumers to get paid for purchases they’d make anyway, and the introductory bonuses make them particularly compelling.” He added, "The cardinal rules, however, are to always pay the balance in full and resist the urge to overspend.”

The study was conducted surveying thirty-two cash-back credit card offers by large issuers in the United States as well as several investment cards that offered similar rewards.

Fewer Late Payments Reported by Top Credit Card Companies

Admin — Tue, 29 Mar 2011 00:00:00 GMT

Some of the major credit card issuers have reported continuingly improving payment habits from their customers in the month of February. All top six credit card companies reported lower payment delinquency rates for the month. This is positive news for the industry, which is starting to see a vast improvement from the huge write-offs apparent two years prior.

Bank of America, Chase, Citibank, American Express, Capital One and Discover all submitted regulatory filings showing lower late payment rates in January. This is a trend that began early last year. As consumers continue their efforts to make their payments on schedule, decreases in delinquency rates are expected to continue. The decrease can also be attributed to the removal of chronic late payers who have had their credit cut off from the group of card users.

Your Phone As a Credit Card?

Admin — Tue, 29 Mar 2011 00:00:00 GMT

Although the idea of using your phone as an electronic wallet has been around for some time, the concept has never really caught on. Today, we see growing popularity in contactless credit cards in Australia. Mastercard's PayPass and Visa's Pay Wave credit cards allow consumers to make purchases by simply waving the card at a sensor.

There are currently thoughts about implementing similar near field communications technologies to smart phones. If implemented successfully, a person's phone can simply be used to pay for a purchase by waiving it in front of a cash register or payment terminal. Near Field Communications (NFC) trails are being run by Google with their Android operating system in the United States. ANZ and Visa have launched similar trials in Australia using the iPhone. This technology typically requires a microSD card slot, which the iPhone lacks. Implementation of the iPhone is expected using iPhone cases or adapters. Current PayWave terminals limit transactions to fewer than one hundred dollars.

Apple is working on its own technology standard and has no plans of implementing a standard NFC chip in the next generation iPhone. For those who are familiar with Apple's business model, this should come as no surprise. The company tends to want greater control over immerging technology and their products.

Credit Card Offers to Become More Transparent

Admin — Tue, 29 Mar 2011 00:00:00 GMT

According to Elizabeth Warren, who is in charge of putting together the new consumer watchdog assigned to regulate financial products, credit card offers should soon become more transparent and less vague.

Warren had spoke before Congress on Wednesday, explaining the goals of the new Consumer Financial Protection Bureau to make credit card offers easier to comprehend.

Warren expressed her goals of "shorter, clearer disclosures and agreements", but has yet to provide clear cut examples of the changes. Though the terms will still be set by the lender, the way it is presented must be clear and open. Information includes penalty terms, interest rates, and policy in regards to rate changes must be apparent and candid.

Current regulations in regards to legal disclosures are written in obscure languages, in small type, and provides little in helping consumers, suggested Warren. She feels a consumers ease in comparing different credit cards can result in a more competitive industry.

Last year's financial overhaul legislation is responsible for the creation of the Consumer Financial Protection Bureau. Although the agency does not officially being until late July, Warrant has already begun recruiting the necessary staff. During which time the Republicans are looking to thin out the agency's power by suggesting a multimember commission as opposed to a single director. Many GOP lawmakers are also looking to have the agency's budget controlled by congress so they may have greater controller over its finances. Money for the Consumer Financial Protection Bureau currently comes from the Federal Reserve.

Debit or Credit Can Cost Three You Percent

Admin — Tue, 29 Mar 2011 00:00:00 GMT

Those familiar with using a debit card will recognize with the question "credit or debit." Since it is a debit card, would it not make sense to answer debit? In fact, debit cardholders have a choice in the matter. One can simply run the transaction as a credit and sign the receipt or as a debit charge that will require a personal identification number.

Even though the decision seems like a simple one for the cardholder, the topic of credit versus debit has been greatly debated in recent events. Among the dispute are credit card companies that claim interchange fees are necessary to pay for the cost of processing the transactions and provide fraud protection, and merchants who suggest that interchange fees by large banks are cutting into their profits.

Debit card transactions are processed as an electronic funds transfer or EFT. Such processes deduct the finances from your checking account instantaneously similar to ATM transactions. Online debit card transactions will require a PIN number and allow cardholders to receive cash back.

Credit card transactions are labeled as signature-debit transaction or offline transactions. They do not require the use of a PIN and requires the cardholder to sign a receipt to complete the transaction. A credit card transaction goes through one of the credit card digital networks such as MasterCard, Visa, Discover, or American Express.

Both credit and debit card transactions come with the convenience of paying with a card and such features as overdraft protection. The source of the debate is the differences in hidden fees collected for each type of transaction.

These hidden charges, or better known as interchange fees, account for over twenty billion dollars in annual processing fees that merchants have to pay for the privilege of accepting plastic payment. Offline transactions typically involve an interchange fee of three percent while online transactions cost a mere one percent. Of the two types of transactions, merchants usually will prefer debit payments because they can keep a higher percentage of the transaction total. On the other hand, banks use the high swipe fee percentage for credit cards to pay for rewards, cash back offers, and other incentives.

Credit Card Rules that Help Cardholders

Admin — Tue, 29 Mar 2011 00:00:00 GMT

Issues associated to credit cards can sometimes be frightening. Often times, credit card companies can be portrayed as villains with the cardholders being its prey. Though this may be slightly exaggerated, many credit card customers have felt vulnerable to the powers of card issuers. This feeling of helplessness had persuaded government officials to sign into law the Credit CARD act of 2009. The government regulations were aimed at protecting consumers from the unethical practices of the credit card industry.

An example of changes which benefit consumers are the rules aimed to protect young individuals and college students. It use to be a common practice for credit card recruiters to bombard students with t-shirts, baseball caps, and free pizza in order for them to sign up for a credit card. In turn, these students soon found themselves overwhelmed with credit card debt. The Credit CARD act of 2009 prohibits representatives of credit card companies to offer gifts to students within one thousand feet of the campus border. In addition, young people under the age of twenty-one cannot get a credit card unless they have an adult co-signer or they can prove their credit worthiness with an adequate income.

Credit card providers are also no longer able to surprise consumers with sudden interest rate increases. The new regulations mandate credit card providers to provide a minimum of forty-five days notice to consumers before any interest rate changes are implemented. The policy changes must also include an option to cancel the card and the new rate cannot be applied to previous debt. Credit card companies are also not allowed to increase interest rates within the first year of issuing the card.

The Credit CARD act also requires credit card providers to retain the same due dates throughout the life of the card. Assigned payment due dates must be on the same day each month unless the particular date falls on a holiday or weekend in which case it is moved to the next business day. Billing statements must also be issued a full twenty-one days before its due date, providing adequate time for cardholders to make preparations for the balanced owed. Current statements must also print a timeline to give cardholders an idea of how long it will take to pay off their debt based on monthly minimum payments.

Regulations involved with the Credit CARD act helps cardholders better manage their debt, while making it more difficult for credit card companies to take advantage of unsuspecting consumers.

Earnings Up for Credit Card Companies

Admin — Wed, 16 Mar 2011 00:00:00 GMT

Based on a statement released by the financial regulator Thursday, Korean credit card firms' earnings increased an astonishing forty-six percent compared to the year before. According to a Financial Supervisory Service report, the accumulated net profit of six local credit card companies increased from 1.86 trillion won in 2009 to 2.72 trillion won in 2010.

The dramatic increase can be attributed to Samsung Card Co. earning 607.5 billion won by selling off its share holdings of affiliated companies and Shinhan Card Co. receipt of 195.5 billion won in tax refunds.

Besides the reported onetime gains, earning figures for the six firms remain fairly stagnant. The report indicated that one of the six card firms, Hana Financial Group Inc.'s joint business venture with SK Telecom Co., reported a loss of 58.9 billion won. Its loses can be attributed to sustaining operation costs required in 2009.

Default rates for the six credit card companies decreased slightly from the year prior. According to the FSS, default rates went down from 1.83 percent in 2009 to 1.68 percent in 2010.

On the contrary, credit card transactions volumes have increased 9.9 percent from a year earlier. Based on information from the FSS, total credit card spending reached 517.4 trillion won last year. The regulator also indicated that the number of credit cards in circulation increased 11.5 percent compared to the year before at a total of 85.14 million cards in use.

Although the numbers indicate a financially sound industry, analyst fear that growing competition may be a damaging factor with credit card companies. The FSS said, "Card firms’ increasing competition to win over customers and provide more gifts has recently led to an increase in card loan issuance, which is riskier assets compared to credit purchase.”

Credit Cards and Online Shopping Jump

Admin — Wed, 16 Mar 2011 00:00:00 GMT

Based on recent studies, it seems that consumers are increasingly dependent on their credit cards for their holiday expenditures. Data also shows consumers are getting ready for Christmas progressively sooner. Credit card spending seems to increase dramatically in November relative to December.

The research conducted by the Payments Council showed United Kingdom consumers spending five sixth as much on November as they did in December. In November, consumers spent £11.2 billion with retailers versus £13.3 billion during the month of December.

In 2009, the consumers spent only eighty percent what they did in 2010. In 2008, the same group spent only sixty-nine percent of 2010 December sales.

Payments Council director of communications, Sandra Quinn said, "The internet has really changed the way we shop at Christmas, with many of us choosing to shop on line to get the best deals and to avoid the shops at the busiest time of year.”

“The problems of dispatching Christmas goods through the heavy December snows last Christmas mean this year, people are likely to get even more organized and get their orders in online early,” she added.

Outstanding credit card is also at its lowest level since the beginning of 2004. Cardholders paying back their dept did so at an increased eight percent in 2010.

With the increase in credit card usage, it is expected for usage of other payment methods to dwindle. Both checks and cash payment volumes have decreased thirteen percent and five percent respectively.

Nearly all the increases over the last five years on total card spending have been indicated to be on debit cards. This is a good indication that consumers are using plastic over cash but are avoiding credit card debt. According to another research conducted by Unbiased, consumers are paying off their debt at unprecedented levels. Based on their figures, a total of £12,081 million was repaid in 2010 alone.

The Technological Future of Credit Cards

Admin — Wed, 16 Mar 2011 00:00:00 GMT

Forty years after the first implementation of the magnetic strip credit card, a new technological revolution in payment methods are about to surface. Credit card providers are currently experimenting with credit cards that can talk to the cardholder. In addition, the cards will be able to double as a reward card as well as display your current balance. The introduction of these new breed of credit cards are anticipated in the United States later in the year.

Implemented in these cards are ultra thin microprocessors that will run on batteries that are expected to lasts up to three years. To defer credit card thieves, the new cards will only display person information after the proper security code is entered.

Different providers are experimenting with different technology. Citibank is working on a new 2G credit card, which has a programmable magnetic strip and buttons on the front for users to choose to use it as a credit card or to spend reward points. Master card has recently displayed a card with a small LCD screen, which displays a one-time code for online purchases. On the other end, phone providers, banks, Apple and Google are working on a mobile payment system that uses short-range wireless signals that transmit encrypted payment information.

Some of these technologies might still be a few years off. President of Double Diamond Group, a consulting firm focused on payments strategy technologies , Todd Ablowitz commented, "Although mobile payments is the future, you're not going to move all that overnight to magical phones. So these are step innovations, rather than leap innovations. Some are very much needed, and some are probably not going to make it."

Compare the Best Credit Card Deals on the Market

Admin — Wed, 16 Mar 2011 00:00:00 GMT

Although many might not feel a need for yet an additional credit card in their wallets, the following deal may charge your mind. Those in the market for a card with car rental, hotel, retail rewards, and airfare it would be difficult to find a card better than this.

JPMorgan Chase is now offering special incentives on their CHASE Southwest Visa card. By simply using the card for a single purchase, cardholders will be granted twenty-thousand bonus points. Twenty-thousand bonus points will generally get you a minimum of two free flights. With shorter distance flights, the amount of points can get you up to four free flights. How many flights you can redeem depends on your desired destination.

There are also other travel incentives included with the card. With the Chase Southwest Visa, cardholders can also redeem points for cruises, free hotel nights, and car rentals.

Those seriously considering a travelers credit card should take advantage of the promotional offers that comes with the Chase Southwest Visa. The promotion could expire at any moment.

Will Groupon Issue Their Own Credit Cards?

Admin — Wed, 16 Mar 2011 00:00:00 GMT

According to a recent Business Week report, the monetized social buying site wants to implement their business model into cash registers around the world. It is observed that VeriFone Systems is in negotiations with Groupon's COO Rob Solomon to add a Groupon Button to their cash registers. If this were indeed the case, would it be stretching it too far to suggest Groupon would issue credit cards as well?

In fact, the idea does not seem so farfetched. Solomon told Business week that the company is in "an evaluation mode," and "test and learn is the best way to do this." The implementation of cash registers is just one payment system that in under consideration.

Issuing debit or credit cards seems a more reasonable path for Groupon as oppose to adding cash out buttons to soon-to-be-obsolete cash registers. Simply adding a Groupon button will merely help merchants keep track of their accounting, while a credit card can benefit both the merchant and the consumer.

Recent data projects Groupons revenue can reach as high as $6.1 billion by the end of the year. In fact, it was noted that the company had rejected Google's acquisition offer set at $6 billion. Analysts indicate Groupon needs to show double-digit sales growth every quarter in order to become a successful IPO. CEO Andrew Mason is currently in takes with Goldman Sachs and Morgan Staley to initiate public offerings in 2011.

Credit Scores Down Along With Consumer Credit Card Debt

Admin — Wed, 16 Mar 2011 00:00:00 GMT

Credit scores of the average American consumer are worst during the last year even though credit card debt fell fifteen percent.

A study conducted by the San Francisco based, Credit Karma indicated a four point drop in the nationwide average credit score compared to a year ago. The lower the credit score, the worst it is for the score holder.

Every individual state in the U.S. saw its average credit card debt fall over the year. The credit card debt of the median American consumer fell to $7,168 or fifteen percent lower since February of 2010. Though many might believe a lower average debt means a better credit score, they would be mistaken. The average consumer's credit rating in America dropped from 669 to 667 from February 2010 to January 2011. This figure then dropped another two points to 664 during the previous month.

A possible attributing factor for the decreased credit ratings is the increase in student and auto loan debts. Within the year, auto loans increased two percent to $15,171. Student loan debt increased eight percent to $29,151.

The still relevant high unemployment and shaken banking industry maybe other factures contributing to the decline. Massachusetts has the highest average credit score in the country at 685. New Jersey and California follows with 683, and 682 respectively. Mississippi carries the lowest average score in the United States with 631.

How To Put Credit Cards to Your Advantage

Admin — Wed, 16 Mar 2011 00:00:00 GMT

Those simply discarding their credit card offers without looking at them may be throwing away an opportunity to easily improve your credit score. When used responsibly and wisely, credit cards can be used to increase your credit rating. Vice president of public education for Experian, Maxine Sweet said, "Put the credit to work for you. Credit is not bad, its bad if you use it badly. I encourage people to look at it as a tool that they manage. You can get good rates, rewards, frequent flier miles. You use it, don't let it use you."

Those who wish to apply for a student or car loan will definitely require a credit history. Every loan you have ever taken out will reflect in your FICO score. This score is used by banks to determine your credit standing and loan eligibility. Unlike a car loan, credit card balances can fluctuate from month to month. By showing banks how well you can manage revolving credit, you can increase your chances of taking out a low interest loan. Maxine Sweet added, "The most important thing to improve your score is to have a credit card. An installment loan is a fixed payment and you don't have to manage surprises. A credit card is self managed and you decide how much you charge each month, how close you get to your limit, whether you let it grow each month or pay it off."

The first thing people should do to improve their credit standing is to know what is on their credit report. A free credit report can be obtained once a year from each of the nationwide credit reporting companies. Jeff Kreici, president of First State Bank in Lincoln Neb, suggest consumers to aim for a FICO score about seven hundred. Kreici said, "At 600 to 620, it would mean a higher fee. Up to around 700 and about that -- no additional fee."

Kreici also suggested that though credit cards are a good way to build a credit history, cardholders should not go overboard with their spending. Credit cards can carry interest rates often as high as ten to twenty percent.

"So many people are using credit to live beyond their means," Sweet said. "In an ideal world, everybody would pay in full and you'd use your credit card for convenience. There are times when it is neat to be able to use credit where you can spend more than you pay in one month, or at holidays, or for emergency, but you've got to stop and create a plan to get it paid back. It keeps your revolving balance low."

Kreici added, "Manage your debt so that 28 percent of gross monthly income is your housing payment -- 38 percent for all payments to creditors."

Charge Card or Credit Card?

Admin — Wed, 16 Mar 2011 00:00:00 GMT

Both a charge card and credit card provides a credit line to which cardholders can use to make purchases. That is essentially, where the similarity ends. The fundamental difference between a credit card and a charge card is that credit cards allow you to keep a balance while charge cards require cardholder to pay off the full balance every month. One of the most popular charge cards available is American Express cards. Interests are charged on unsettled balances each month with traditional credit cards. On the contrary, because balances are settled every month, there is no interest payments involved with charge cards. Although charge cards may seem like an ideal way to build or rebuild an individual's credit score, cardholders should be wary. Charge cards typically do not have a predetermined credit limit and can lead to irresponsible spending behaviors. This behavior may be what lead people into debt in the first place. So whether you choose a credit card or a charge card, it is vitally important to spend wisely and responsibly.

MasterCard or Visa? Which Should One Choose?

Admin — Wed, 16 Mar 2011 00:00:00 GMT

Those looking to apply for a new credit card may ask themselves whether a Visa or MasterCard is more beneficial to have. What are the fundamental differences between the two cards?

In fact, there are very few distinctions between using a Visa card and MasterCard for most individuals. Both companies are simply the payment networks responsible for processing the credit card transactions. They are essentially the intermediaries between the bank that issues the credit card and the consumer who carries and uses it. Lucrative rewards programs, which typically influence a consumer's choice in credit cards, are not determined by these payment networks.

What credit card is right for you can be determined by the benefits provided by issuing banks. An example of a good cash rewards card is the Chase Freedom card issued by JPMorgan Chase. The Chase Freedom card is available both as a Visa and as a MasterCard. Both versions carry identical incentives such as a one hundred dollar bonus cash back and a zero percent introductory APR. The Chase Freedom card is also nominated as being the best credit cards in 2011.

On the other hand, some might be more interested in consolidating high interest credit card debts. For these individuals, zero balance transfer credit cards that offer zero introductory APR on balance transfers for a certain amount of time may be the best option.

The Discover More Credit card is a good example of such a card. The card is issued by Discover Financial and is neither a MasterCard nor a Visa. The Discover More Card requires no balance transfer fees and provides zero percent introductory APR on balance transfers for the first year. The same zero percent APR is offered on purchases as well. Additionally, the Discover More card is a rewards credit card that will offer cardholders cash back whenever they make a purchase.

At the end of the day, both MasterCard and Visa has similar benefits that can be valuable to cardholders. Cards from both payment networks are widely accepted throughout the world. The card you choose should be dedicated by your own personal spending habits and financial circumstances.

The Top Two Travel Rewards Credit Cards of 2011

Admin — Wed, 16 Mar 2011 00:00:00 GMT

Although cash back rewards credit cards are growing in numbers again, attractive travel rewards credit card incentives were always available. Here are two examples of good reward bonuses from travel credit cards.

Those who prefer JetBlue Airways will find the American Express JetBlue Card very tempting. With you initial purchase with the card, ten thousand bonus TrueBlue points will be instantly rewarded to you. Ten thousand bonus points is generally enough for a free round trip domestic flight on JetBlue. By occasionally using your card to purchase flights, the card involves no blackout dates nor do your bonus points ever expire. On the down side, American Express JetBlue card does involve a forty-dollar annual fee. This fee is easily justified by the ten thousand bonus points provided with its initial use. The card can be simply obtained by visiting JetBlue's TrueBlue web site.

Another travel credit card worth mentioning is the Southwest Airlines Visa Signature card. All Visa signature cards already provide added purchase and travel protections to their card members. Similar to the American Express JetBlue card, the Southwest Airlines Visa credit card gives cardholders a free flight after the first purchase. The card also carries a Fifty-nine dollar annual fee. This is a reasonable amount considering the extra incentives involved with Signature cards from Visa. Those wishing to apply for the card should do so quickly while the free flight bonus is still available.

Important Information about Credit Cards and Debit Cards

Admin — Thu, 10 Mar 2011 00:00:00 GMT

The major difference between a credit card and a charge card is that charge cards do not allow you to carry a balance. Charge cards as the American Express card requires you pay your balances in full every month. Typical charge cards like the AmEx Green will require a ninety-five dollar annual fee but comes with generous reward offers.

Debit cards allow you to spend within your financial means. They typically do not require interest charges or monthly fees and are accepted almost anywhere. Debit cards may have the same protection and reward programs as some credit cards. A credit limit to your debit card is limited to the actual amount available in your checking account.

Prepaid debit cards look very similar to regular credit cards or debit cards. These are being marketed aggressively by banks in order to balance offset lost revenue caused by the implantation of the CARD Act of 2009. Unfortunately, prepaid debit cards are riddled with miscellaneous fees and charges. Activation fees can run as high as twenty dollars while many can charge monthly charges of up to ten dollars a month. ATM withdrawal and reloading of cards also require additional fees.

Secured credit cards are also growing in popularity. Those who do not qualify for a traditional credit card can most likely obtain a secured card to establish or rebuild credit. Secured credit cards typically require a deposit which in turn becomes your credit limit. Associated banks would report your transactions to the credit bureaus every month. Therefore, a good payment history will be a improved credit score.

Top Visa Credit Cards With Cash Back Rewards Offers

Admin — Thu, 10 Mar 2011 00:00:00 GMT

It is common knowledge that credit cards are a blessing for those with the urge for a bit of retail shopping but are a bit strapped for cash. A credit card that are accepted almost anywhere in the world are Visa credit cards. Visa is a payment network associated by many banks.

Those looking for a Visa credit card, which offer excellent cash back and reward programs would not be disappointed by the following recommendations.

One of the best cash back Visa credit card available in the United States is the Chase Freedom Visa. The card allows you to earn a hundred dollars after spending five hundred dollars within the first three months of opening the account. The card also does not require any annual fees.

The Citi Forward Visa credit card also does not require any annual fees. The credit card allows you to earn reward points for spending as well as paying your bills in a timely manner.

Finally, the Chase Sapphire card is the best travel rewards Visa card available through JP Morgan Chase. Simply using the card will award you with points, which you can redeem for airline tickets, cruises, gift cards, cash, and hotels. The Chase Sapphire credit card also requires no annual fees.

Whichever card you decide on, it is important to read the terms and conditions.

Myths on Shopping Online with a Debit Card

Admin — Thu, 10 Mar 2011 00:00:00 GMT

According to a recent study, nearly fifteen percent of us share our credit cards and PINs to others. This may be the reason why twenty-five percent of Canadians have at some point been a victim of credit card fraud. To better understand the workings of debit cards and avoid being a victim, here are facts and myths about online shopping.

Is it a good idea to give your credit or debit card PIN number to your family and friends? The simple answer is no. One should never let anyone else know or use your PIN. This includes friends and family members. Cardholders should avoid writing down or carrying the number in your wallet as well.

Wi-fi networks found in coffee shops and hotel lobbies may not be a safe place to conduct any online credit card transactions. When logged on to an unsecured network, bank passwords and information can be easily obtained by hackers.

When shopping online, there are often simple clues to figure whether or not a website is safe. Simply looking at the lower corner of your browser will review a padlock or key icon to show if a website will securely send your personal information or credit card numbers. A closed padlock usually indicates that certain security technology is implemented to scramble your credit card number and personal information.

Those who are unfortunate enough to be a victim of identity theft can most like get their money back. Visa cardholders are protected through the Visa zero-liability policy. The zero-labiality policy simply means that cardholders are not responsible for fraudulent or unauthorized charges on their Visa accounts. Those using debit cards are protected by the Canadian Code of Practice for Consumer Debit Card Services.

How to Pay off Credit Card Bills Quickly

Admin — Thu, 10 Mar 2011 00:00:00 GMT

Credit cards are extremely convenient and useful part of our daily lives. Even so, it is vital for cardholders to carefully manage its use and know exactly how much interest they are paying.

A representative for Candidmoney.com, Justin Modray suggests consumers to pay off their credit card balances and soon as possible.

Mondray explained, "Paying for a holiday by credit card carries the added benefit that purchases over £100 are covered by the 1974 Consumer Credit Act if you pay the supplier directly. However, credit cards are usually an expensive way to borrow money so try to avoid using cards for big purchases unless you plan to repay the bill shortly afterwards."

"For example, if you pay for a £500 holiday using an 18 per cent annual percentage rate credit card and then simply make minimum monthly payments thereafter, it could take over nine years to clear the debt and cost you £340 in interest. Credit cards can be very useful when spending abroad as they save the need to carry lots of foreign currency. Just beware most card providers levy a currency charge of about 2.75 per cent on purchases and an extra two per cent for cash withdrawals."

Modray also recommended consumers study the terms and conditions of credit cards they plan to apply for as well as the conditions relevant to cards they already use. He also said that most people apply for credit cards without properly reviewing the conditions of use.

He commented, "I worry there's still a culture of chasing cards with high credit limits rather than a decent rate of interest. But fortunately there are some attractive credit card deals around and the internet makes it easier than ever to find them."

"Price comparison websites are often a good starting point, although beware they may give most prominence to the providers that pay them the highest commissions," he added.

Because financial situations can change very quickly, managing debt levels should be everyone's number one priority.

Mondray continued by saying, "As public spending cuts and higher taxes continue to take their toll, there's little doubt some families will increasingly struggle to balance their finances, but it's not all bad news."

"I think the likelihood of the Bank of England raising interest rates this year is slim, which means families with decent variable rate mortgages should continue to enjoy low monthly payments. However, the high rates of interest charged by many credit cards will persist, so managing expensive debt should really be the financial priority for most households."

Master Card Urges Postponement of Processing Fee Rules

Admin — Thu, 10 Mar 2011 00:00:00 GMT

Regulations were enacted last July, aimed to limit the processing fees that merchants have to pay banks and networks every time a customer buys something with a debit card. The new provisions only affect larger banks with assets of more than ten billion dollars. Smaller banks and credit unions are exempt from the rules and may charge higher processing fees.

Visa Inc. has suggested implementation of the rules in two tier stages, allowing large and small banks to charge different processing fees.

In a recent comment from the president of MasterCard's U.S. Markets, Chris McWilton expressed MasterCard's unwillingness to follow Visa's lead.

McWilton commented, "We're prepared, we're doing the back-office work to prepare for it, but we are not making a decision on actually whether to implement it."

He added, "We don't believe at the end of the day that a two-tier fee structure is sustainable in the long term."

McWilton estimates that the Federal Reserve's proposed rules to cap debit processing fees at about twelve cents per transaction will cost banks and networks almost fourteen billion dollars in revenue every year.

Although the rules are expected to be implemented by July, the debit card industry is campaigning to delay or repeal them.

McWilton feels a delay of the rules is possible but repealing them may be a difficult challenge. He added, "What we're hopeful for is a study, dialogue, diligence and debate on the matter, which never happened before ... I think that would be ample time."

Executive from Master Card Labeled U.S. Economic Recovery Erratic

Admin — Thu, 10 Mar 2011 00:00:00 GMT

Although the economic recession may be over for the United Sates, increasing gasoline prices may still discourage consumer spending. This is what the payment network's president of U.S. markets, Chris McWilton said at the Reuters Future of Finance Summit.

McWilton added, "It's slow; it's erratic, the statistics we see suggest it is a slow recovery. People continue to be cautious with what they spend. Confidence is building, but at a fairly slow rate."

He suggested that elevated gasoline prices would be best test in regards to the certainty of the recovery. Due to the volatile situation in the Middle East, crude oil prices increased to $114 a barrel on Tuesday.

He said, "If you get a $4, or some people are predicting $5 gallon of gas, that could be the wildcard."

McWilton also suggested that retailers would more likely find willing bank partners to issue their own branded credit cards.

"Organizations are starting to say, 'This is behind us, we at least can put together a set of assumptions about bad debt loss rates and unemployment levels,'" he said.

A prominent example of this would be Target Corp. Last week, the company reported quadrupled revenue from its credit card business during the fourth quarter of the year. The increase in profit can be attributed to a fewer number of consumer debts being written off.

McWilton said the market for credit card portfolios have improved dramatically in recent times.

"There were just not a lot of buyers that wanted to jump in the middle of the typhoon," he said.

MasterCard is also expected to make more deals in the online retail sector, which is now predominately controlled by companies like Amazon.com. In October, MasterCard paid $520 million for the British online payment services company DataCash. More acquisitions of such nature is expected. McWilton said, "It is the only area where you can't do something with cash or a check- it's made for electronic payments products."

Debts May Not Be Helped with Credit Card Debt Management Plans

Admin — Thu, 10 Mar 2011 00:00:00 GMT

Varieties of debt relief programs are available to Americans looking to relinquish their credit card debts. These programs typically involve borrowers pay a consolidated and manageable monthly payment fee that will allow them to slowly pay off their credit debt.

The monthly payment involved is usually worked out by experts working for a debt settlement firm. These payments are more than likely to incorporate additional fees implemented by the debt settlement firm for their services. Even so, these services relieve consumers of the wearisome process of managing the debts yourself. It is usually true that debt management plans will lower the amount consumers will need to pay to relinquish their debts. In addition, annoying calls from recovery agents and creditors will immediately cease.

Therefore, it may seem that debt management plans is an ideal solution. CEO of Cambridge Credit Corp., a non-profit credit-counseling agency Chris Viale said, "No." “Once you allow yourself to fall into unmanageable debt, there’s no easy way out. Debt consolidation may sound like an easy cure, but even successful professionals have found that this choice often leads to an even more burdensome debt load, "he added.

The fundamental problem with making small monthly payments is that it will prolong the repayment schedule greatly. By carrying the debt for a long period, consumers are essentially increasing the amount needed to pay off the debt. It may also reach a point where simply making the lowest monthly payment possible may be too difficult for the debt barer.

Over 1.3 Million People Apply for A 40% Interest Rate Credit Card

Admin — Thu, 10 Mar 2011 00:00:00 GMT

An astonishing 1.3 million desperate consumers applied for a debated credit card last year that charged its customers an appalling forty percent interest rate.

The particulars of the happening were revealed as the borrower Provident Financial released their profit earnings showing a thirteen percent increase in 2010. Four out of every five applicants where rejected for its Vanquis card, said boss Peter Crook. Even so, the company approved 241,000 customers the year prior.

Crook suggested that this reflects the fact that banks are making it increasingly more difficult for consumers to access credit. He said, "Some are only issuing credit cards to existing current account customers."

Vanquis primarily focuses on those consumers with poor credit. Cards issued through the company typically starts with credit limits as low as £250. If the cardholder shows a good payment history, their credit may increase.

Crook added, "The average limit is about £1,000 and the typical balance outstanding is around £600."

Crook also said they are losing forty percent to borrowers who fail to repay their debts. Yet Vanquis reported a ninety percent profit increase last year.

Vanquis also specializes in short-term loans of £100 to £500 with repayments collected by a network of twelve thousand agents. This particular branch did not performed as well. Crook commented, "Household incomes were under pressure from wage freezes and cuts to working hours coupled with rising food, fuel and utility bills." He anticipates 2011 to remain just as difficult.

Best Credit Card Offers For March

Admin — Thu, 10 Mar 2011 00:00:00 GMT

As of the beginning of March, a fresh new set of credit card offers are available to consumers.

The best credit card balance transfer deals goes to the Discover More credit card. New card members will get zero percent introductory APR for the first year on balance transfers as well as purchases. Additionally, by simply spending five hundred dollars on the new card within the first three months will earn you one hundred dollars cash back.

The United Mileage Plus Signature Visa card get the honor of being the best airline rewards credit card for the month. First time users can get 25,000 bonus miles after the first purchase with the cards as well as a fifty-dollar statement credit. Adding additional authorized users to your account will also grant you an addition five thousand bonus miles. The easily accessed 30,000 bonus miles can easily get someone a free roundtrip flight.

Another airline credit card receiving top marks is the JetBlue Airways American Express card. For those frequently flying out of the JFK airport, they have their own terminal with a variety of shopping and dining options. The JetBlue card will give you ten thousand bonus points after your initial purchase and an additional ten thousand points after spending five hundred dollars within the first three months.

There are also several cash back credit cards worth mentioning. The Chase Freedom credit card offers one hundred dollars bonus cash back by simply spending five hundred dollars within the first three months. It will also earn you five percent cash back in quarterly bonus categories such as home improvement, gas, and department stores. Another great cash back credit card is the BankAmericard Cash Rewards card, which offers a flat one percent, cash back on all purchases. Bank of America has a simple online redemption system that is worth praising.

Study Shows Bank Credit Card Regulations Not Hurting Cardholders

Admin — Thu, 10 Mar 2011 00:00:00 GMT

With the passing of the Credit Card Accountability, Responsibility and Disclosure Act of 2009, many financial analysts expected adverse impacts on the consumers. It was predicted that it would be more difficult for consumers to apply for credit cards as well as make it more expensive for them to use.

A recent study by the Center for Responsible Lending proved otherwise. Based on the study, banks had not increased credit card interest rates any more than what was implemented before the new rules. Nor was it increasingly difficult to obtain credit cards.

The volume of direct-mail credit card offers to consumers remained consistent with economic environments. The lack of change in this specific area showed there were no changes in the banks willingness to extend credit.

However, the study did indicate an increase in credit card interest rates from card companies' solicitations. Even though this is true, the average credit card interest rates paid by the consumers have not risen. This showed that credit card companies are being more open on disclosing usage costs to consumers. The study estimated $12.1 billion in hidden annual charges implemented by the credit card industry prior to the new regulations.

The group suggested that less price ambiguity would mean lower credit card costs in the end "by spurring completion and making it harder for issuers to manipulate or arbitrarily raise prices."

The Credit CARD Act of 2009 included many reforms aimed at protecting consumers and making credit card companies more transparent. Included were provisions requiring that credit card companies notify consumers forty-five days prior to making any significant policy changes, requiring them to disclosure how long it will take cardholders to pay off their balances, and banned increases in credit card interest rates during the first twelve months after the card is issued.

New Credit Card Statistics Show Increase in Spending

Admin — Thu, 03 Mar 2011 00:00:00 GMT

Recent data released on Monday showed a dramatic increase in credit card usage in New Zealand. The increase is the largest recorded in nine years and occurred amidst a week labor market and a less than ideal economic recovery.

According to the Reserve Bank of New Zealand, total credit card billings jumped 3.8 percent last month. This is nearly equals the 1.7 percent decreases the month before and is the highest gain since December of 2001.

Average annual increases are also the best since May of 2008. Credit card billings increased 5.6 percent from the previous year.

Additionally, electronic retail card spending also showed the largest increase in five years. It was reported that electronic retail card spending had a seasonally adjusted increase of 2.4 percent. A majority of the increase can be attributed to spending in appliances, furniture, fuel and food.

Data provided in January greatly contradicts fourth quarter findings, which showed slowing retail volumes. Many had speculated that the economy would slip back into recession in the final quarter of the year.

According to an ANZ-Roy Morgan consumer confidence survey, consumers remain cautious about spending and still have a nervous outlook on the economy.

Slow domestic activity can be attributed to the RBNZ maintaining its cash rate at three percent. There are now plans to increase the rates unless signs of a robust and sustainable recovery are observed. Most economic experts predicts this will not happen any earlier than September.

Credit Card Rules Shown to Help Consumers

Admin — Thu, 03 Mar 2011 00:00:00 GMT

Based on the findings of an advocacy group study, the recent credit card regulations has made an improvement in making banks more transparent in their practices and lowering the cost of using cards.

The effects of the Credit Card Act of 2009 were studied by the Center for Responsible Lending. In its findings, they have concluded that, contrary to popular belief, the regulations had no affect on the actual prices for credit card use and available credit has not tightened beyond what would be predicted.

A spokesperson for the American Bankers Association believed that it was too early to measure the law's impact on the industry and consumers. The group has not yet initiated their own studies in the matter.

ABA representative Peter Garuccio wrote, "Overall it has been a net positive for consumers, but there have been trade-offs."

"Consumers now benefit from greater transparency and control over their card accounts. The trade-off is that some consumers that used to have access to credit cards no longer do or are paying higher prices for it. The difficult part is teasing out just how much of these changes to attribute to the CARD Act and how much to attribute to the economic downturn. We think they are attributable to both," he continued.

The advocacy group added, "An estimated $12.1 billion in previously obscure yearly charges are now stated more clearly in credit card offers."

Credit Card Issuers Opposes Debit Swipe Fee Cap

Admin — Thu, 03 Mar 2011 00:00:00 GMT

Oppositions to the Durbin Amendment have recently been registered by both Mastercard and Visa, the two largest credit card companies in America and the entities who determines the interchange fees.

The Durbin Amendment allows the Federal Reserve to place a cap on debit card swipe fees. It also forbids anti-competitive practices by the payment networks that set the fees while the banks collect them. The proposal will go into effect in July of this year. The new regulations will limit swipe fees at twelve cents, which is a seventy percent drop from the average fee applied today. It is forecasted that the banks will lose an estimated $11.3 billion in revenue.

General Counsel for Visa, Joshua Floum said, "The Durbin Amendment and the Board’s proposal would supplant free market pricing in favor of government price controls, and could single-handedly remove all incentives for debit card issuers and payment card networks to innovate in debit card payments.”

Floum argued that debit cards are nothing more than electronic checks and should have the same restrictions as paper checks. “Debit cards provide consumers and retailers with the ability to make and receive instantaneous payments,” he added.

Chris McWilton, president of Mastercard Worldwide wrote a blog post, which showed his consensus with Floum's statements. “These price controls have been publicly condemned by both Democrats and Republicans for delivering little to benefit consumers and in fact may actually result in significant harm,” McWilton wrote. “Changes of this magnitude should not be imposed without serious thought, analysis and study of the long-term consequences to the financial system and the larger US economy.”

New Annual Fees for Bank of America Credit Cards

Admin — Thu, 03 Mar 2011 00:00:00 GMT

Certain Bank of America customers may find themselves with an unpleasant surprise in the form of credit card annual fees. These added fees are expected to affect millions of customers, but the company has not released specific information on who will be affected.

For those who are targeted this spring, the fee will be fifty-nine dollars. Letters from the company are being issued to affected customers highlighting the annual fees and the three basic reasons for the implementation of such fees.

Based on the information in the letter, the changes are due to derogatory public record or collection filed, balances relative to applied credit lines are too high, and a review of the banking relationships with that particular customer. The printed language used by Bank of America is not only complicated buy vague in context as well.

Bank of American seems to be taking advantage of those customers who already have balances on their credit cards. To get around current credit card regulations, the company is offering the option for customers to close their accounts if they disagree with the extra surcharges. However, a majority of cardholders carries a balance because they do not have the necessary finances to pay off these balances. This ultimately leads to consumers having to accept the annual fees with little real choices.

The most opposing aspect about the implementation of these new fees is that it can be applied to those who have never been late with their payments or have gone over their limits. These Bank of America customers can be an ideal consumer but will be punished simply because they fall into the selection criteria that the bank databases decided upon.

Bank of America credit card users should keep a look out for this letter since it will tell you exactly when the new fees would be implemented.

How Balance Transfer Credit Cards Can Help

Admin — Thu, 03 Mar 2011 00:00:00 GMT

For those cardholders looking for debt consolidation, avoid missing payments, or simply as a method to make payments more affordable, balance transfer credit cards may be an ideal solution. Balance transfer cards allow these individuals to consolidate their debts as well as offer them lower interest rates. According to Bankrate.com, balance transfer cards typically have an interest rate of 15.96%. However, there are offers available that are lower than the average interest rates and may even have a zero percent introductory rate.

As more financial institutions attempt to get back into the credit card lending business, low or zero interest balance offers are becoming more frequent. Besides making it more affordable for consumers to pay off their debt, balance transfer credit cards also allows debt holders to combine their balances so that they are easier to manage.

However, customers should be cautious of the interest rate increases after the introductory period ends on balance transfer offers. By simply paying the minimum required payment, consumers will have to deal with large interest payments and a prolonged payment schedule. It is advisable for consumers to put as much of their income as they can to pay off their balances.

For those who have the opportunity to make more than the minimum monthly requirement on a credit card balance transfer, doing so will be in the best interest for the cardholder. Paying more than what is required allows cardholder to erase their debt faster and in a less costly manner. As long as there are no penalties for early payments, erasing debt as quickly as possible can always be more cost efficient in the end. One should shop around for the balance transfer credit card offer most suited to their financial situation and needs.

Assistance from Credit Card Debt Management

Admin — Thu, 03 Mar 2011 00:00:00 GMT

As credit cards became widely available, most consumers used their cards for a majority of their purchases. However, as the economy took a turn for the worst, most Americans are reverting to their old ways in using cash. According the Taocredit.com, the median family has an average of $10,700 credit debt and at least one credit card.

Analyst for Bankrate.com, Greg Mc Bide explains the shift is brought about either by choice or by force. However, he adds that the change from cashless to cash is a fundamental one. Based on the Nielsen reports, credit card usage increased thirty-eight percent in the year 2005. In 2010, the number of users increased a staggering forty-five percent.

On the contrary, cash payments decreased from twenty-one percent to nineteen percent from 2005 to 2010. Shifting methods of payment should be carefully considered since it can adversely affect a person's financial standings, added Mc Bride. For those who use credit cards for more than forty percent of their spending, he suggested that using credit cards are still advisable.

Why It Is So Difficult to Get Out of Debt

Admin — Thu, 03 Mar 2011 00:00:00 GMT

Those applying for a credit card, car loan, or mortgage are rarely warned of the consequences they might be getting themselves into. The bad credit cycle that individuals can get themselves involved in are often very difficult to climb back out of. To avoid these unfortunate circumstances, it is important for consumers to understand the pitfalls of debt.

Unfortunately, falling into debt is extremely easy. How much credit one can obtain typically drives the society we live in. Individuals are strongly encouraged to take out credit cards, mortgage, and car loans; so much so that if we do not, we will get a sense of limited self worth. People can easily get themselves into debt when they underestimate their repayment capabilities, do not manage their finances well, suffer unexpected circumstances, and live with a spouse's or dependent's mistakes. Our current credit and lending system makes it easy to fall into debt by simply making a single mistake. Getting out of this debt is also extremely difficult.

Debt is so difficult to get out of for a few fundamental reasons. The most important reason why debt is so difficult to pay off is that interest and penalty fees are constantly being tacked on after you are late with your payments. Temptation also plays a key role as it encourages you to add more to your debt. Additionally, many individuals simply give up any attempts to pay off the debt after seeing their credit score plummet. They often feel it is pointless and gives up.

Though getting out of debt is challenging, it is far from being impossible. Talking to your creditor, setting up a payment plan, and looking into debt relief options are all methods in paving your way to being debt free. Individuals can also avoid debt all together by paying your bills promptly, being aware of your credit utilization ratio, and spending only as much as you can pay for.

Visa to Unveil Mobile Phone E-Wallet

Admin — Thu, 03 Mar 2011 00:00:00 GMT

According to a recent CNET report, Visa will begin introducing a service that transforms smartphones into electronic wallets in the second half of 2011. Near Field Communication (NFC) short-range wireless technology will be implemented by VISA in order to accomplish this.

Bill Gajda, global head of Visa Mobile claims that the new technology in NFC will include instantaneous anti-fraud alerts and other protection systems. The PayWave system was unveiled by Visa at last week's Mobile World Congress 2011.

Although mobile phone payment technology has increased dramatically, the concept has yet to become popular with consumers, mobile phone manufacturers, and retailers. Visa's method of converting smartphones to e-wallets involves inserting a microSD memory card into the secure digital slots on phone. The memory card works in conjunction with Visa's PayWave downloadable phone applications.

Gajda commented, "People don't want to wait two years for NFC-enabled phones to come out or to switch phones. You can make payments today on the iPhone 4."

Chase, U.S. Banks, Wells Fargo, and Bank of America are experimenting with similar technology. Other companies looking into NFC chip technology include Apple, Sprint, and Nokia. Starbucks customer was able to use their Apple iOS and BlackBerry devices to make mobile payments last month.

Credit Card Usage Jumps 3.8% in New Zealand

Admin — Thu, 03 Mar 2011 00:00:00 GMT

As of January 2011, the credit card spending seasonally adjusted in New Zealand increased by 3.8%. The increase follows a 1.7% jump from the month before.

In January2011, the total spending amount hit NZD 2,451 million. Throughout the year until January of 2011, the total figure jumped by 5.6%. This is a notable increased from the 2.1% jump over the year to December of 2010.

Foreign Exchange Fees Waived for Chase Continental and United Cards

Admin — Mon, 21 Feb 2011 00:00:00 GMT

For those individuals who are fed up with fees charged by credit card companies when merchants process a transaction outside of the United States, there is a bit of good news.

Chase announced Wednesday that they will no longer charge foreign exchange fees on their Continental Presidential Plus and United Mileage Plus Club Visa cards. Those with a Chase Continental or United Card that do not bare this name will be subject to the same fees for transactions outside the United States. Cardholders are encouraged to call their credit card company to clarify this information.

This change can be attributed to the growing discontent by cardholders towards the implementation of these fees. Though there are still a majority of credit card issuers that continue to apply foreign exchange fees, there is strong trend towards its abolishment. This changing of tides is the result of those individuals who have complained loudly and whom have never stopped pointing out how immoral these fees are.

Citigroup has already dropped the fees on select cards, while Chase has done so on their British Airways, Priority Club, and Hyatt credit cards. American Express plans to do the same.

Chase Brings 0% APR and $100 Bonus Cash Back Credit Card

Admin — Mon, 21 Feb 2011 00:00:00 GMT

Chase has just released a new personal credit card called the Chase Freedom $100 Cash Back 0% APR card.

The newly introduced Ink Bold with Ultimate Rewards $100 Bonus Cash Back card from Chase is very popular among businesses in the United States. The card offers an abundance of rewards that will benefit consumers and their business in various ways.

Customers can also take advantage of all the benefits of this card free of charge. Chase disclosed that the new card has a new annual fee structure. For the first year, the annual fee of ninety-five dollars is waived. Because this is a charge card, consumers would have to pay their balances in full each month, voiding the need for interest fees.

Unlike traditional credit cards, the Ink Bold with Ultimate Rewards $100 Bonus Cash Back card has no predetermined credit limit. This allows business the purchasing power their company requires.

The Ink Bold Visa Signature Concierge Service card is also available to assist its customers throughout the world.

Banks May Require More than Your Credit Score

Admin — Mon, 21 Feb 2011 00:00:00 GMT

Many individuals applying for a credit card may be surprised by what lenders look into in order to process the applications. In some situations, simply looking at your credit score is no longer sufficient. Lenders often look deeper in order to weed out risky borrowers and find those with the best financial qualifications. Here are some further information lenders may look at in addition to your credit score.

When applying for a loan or credit card, a borrower's behavior score may be taken into consideration. President of consumer education for SmartCredit.com, John Ulzheimer says that these scores have always been around but are more important today. Behavior scores are based on past credit limits, whether an individual carries a revolving balance, which type of credit card is used, or if a credit limit is ever exceeded. Most of this information is rarely found in credit reports. Behavior scores are typically determined individually by the lender and are based primarily on a cardholder's performance with their specific cards. When a consumer requests a credit limit increase or interest rate reduction, the bank will usually review the person's credit score as well as their behavior score.

Though shopping habits ties into a person's behavior score, it is important enough to be highlighted on its own. CEO of CreditKarma.com, Ken Lin suggests that lenders are more frequently reviewing their customer's spending habits. Information in regards to what you buy and where you buy it is taken into consideration. Lin commented, "There's speculation that if someone historically shops at, say, Bloomingdale's, and the bank sees them shopping at Wal-Mart, it could trigger an account review. They might wonder if you were recently unemployed. It could lead to a higher risk profile of the user, all else being equal."

Another aspect probed by lenders is an individual's bankruptcy score. A bankruptcy score is simply a number indicating a person's likelihood of filing for bankruptcy. Though these scores are not available to the public, creditors can obtain this information through Trans-Union and Experian.

How to Boost Your Credit Card Limit

Admin — Mon, 21 Feb 2011 00:00:00 GMT

Those starting out with a new credit card may find the spending limit lower than what they want. Spending limits issued to first time card users are typically around the range of $1000 to $1500. Those who would want a larger limit should not despair. By proving your credit worthiness and showing financially responsible behavior, one can easily increase their spending power in due time.

Increasing your credit card limit involves a few fundamental tips. First, it is vitally important to pay all your bills on time. Bills should also be paid in full as often as possible. Cardholders should refrain from charging more than you can afford to pay back. Individuals should try to avoid the complexities of credit card fees and balance transfers. Finally, call your credit card provider if you do happen to be late in a payment. If it is your first time or if you have a reasonable explanation, they may be able to waive the late charges.

Once a strong history of payments have been established and your responsible financial practices instated, you can begin considering increasing your credit limit. In some occasions, the credit card provider may do this automatically. If this does not occur, you can simply contact your credit card company to request a credit line increase. The card issuer may not increase your limit on your first attempt. If this happens, continue to pay your bills in a timely manner and in full when possible. This way, the next time you attempt for a credit line increase, you would have your chances improved.

Citigroup Reports Drop in Defaults and Late Payments for January

Admin — Mon, 21 Feb 2011 00:00:00 GMT

In a recent statement by Citibank Tuesday, the company had reported fewer late payments and defaults for the month of January. This seems to be an ongoing trend throughout the credit card industry as other major card issuers also reported multi year lows in this category.

In a recent regulatory filing, the credit card division of Citigroup Inc. reported a charge-off rate of 7.49 percent of balances on an annualized basis. This is a drop from 8.34 percent, which was reported in December. Current default figures are at its lowest since February 2009.

Of the top six credit card issuers in the United States, Citi has reported the largest drop in charge off rates since February 2009. Write offs are initiated usually after the payments reach 180 days past due. On September 2009, Citi reported its highest charge off rate of 12.14 percent.

According to the latest Federal Reserve date, the charge off rate reached its peak, industry wide, in the second quarter of last year. During that time, the average charge off rate was at 10.37 percent of balances. An averaged 3.82 percent was reported two years before the recession.

Late payments of thirty-five days or more also fell to 4.35 percent in January for Citi. This was down from 4.44 percent in December. The reported figure was the lowest level of delinquency City has announced in more than twenty-four months. The fall in delinquencies is encouraging since late payments typically lead to defaults.

The figures were unexpected since credit card usage is expected to increase during the holiday season. Federal statistics typically show credit card debt increases in December. Revolving debt held by American consumers increased to $800.5 billion in December. This is after dropping predictably since the summer of 2008 when it peaked at $973.6 billion. Current figures are now at the point it was in 2005.

Credit Card Improvements for Chase and Citigroup

Admin — Mon, 21 Feb 2011 00:00:00 GMT

Continuing improvements in the credit card industry are apparent from recent reports from Citigroup and JPMorgan Chase. According to Sandler O'Neill research, both companies reported a drastic fall in delinquency rates.

Both JPMorgan and Citigroup had the biggest fall offs in thirty day delinquencies in the group. Citigroup's delinquencies fell by eight basis points while JPMorgan declined by nine basis points.

Analyst at Sandler O'Neill, Michael Taiano noted, "Delinquency rates declined despite a seasonal decline in loan balances. On a dollar basis, 30 plus day delinquencies declined 6% versus the prior month."

Charge off rates was also lower in January. JPMorgan reported a drop in charge-offs by 102 basis while Citigroup a decline of 85 basis points. American Express and Bank of America both recorded drops of 44 and 11 basis points respectively.

Although credit card loan growth has decreased five percent since December, Taiano speculates that 2011 should bring some modest single digit growth.

He noted, "Keep in mind yield is highly seasonal and can be heavily influenced by the number of collection days, pricing and fee changes, and things such as transaction volume, which drives higher interchange revenue in December."

Closing Credit Card Accounts May Have Their Drawbacks

Admin — Mon, 21 Feb 2011 00:00:00 GMT

A majority of Americans have a number of unused credit cards. However, in an attempt to simplify their finances, many consumers have begun cutting back on their credit card usage. What many may not know is that closing your unused credit card accounts can bring about some unwelcomed consequences to a person's credit score. There are several things consumers should know to minimize the detrimental effects closing a credit card account has on an individual's credit score.

Primarily, cardholders should consider how closing a card could affect your credit utilization ratio. Though the FICO credit scoring system does not penalize a person for closing an account, there are indirect penalties for doing so. Closing a credit card account affects a person's credit utilization ratio. An individual's total credit utilization ratio is the percentage of available credit that has been used across all their credit cards. This percentage is the second most important factor in determining your credit score and accounts for thirty person of your FICO score.

By closing off a credit card, you are inadvertently decreasing the amount of available credit available to you. As a result, the credit utilization ratio has increased as well. To determine what kind of an impact, closing the card has on your credit score, you would need to compute the resulting credit utilization ratio would be after a particular account is closed. This can simply be accomplished by totaling the balances and the credit limits across all remaining credit cards and dividing it by the total credit limit available. This will help you determine if your utilization ratio is within an acceptable range.

Experts may have different number for the ideal credit utilization ratio. However, it is the consensus that those with excellent credit should have a ratio below thirty percent. This percentage should be within each individual card as well as across all credit cards. Some prefer an even lower ratio as individuals with the highest credit scores typically have utilization ratios below seven percent.

Credit Card Offers More Truthful

Admin — Mon, 21 Feb 2011 00:00:00 GMT

There are many indications that the credit card industry is booming once again. In the month of December, unsettled credit card debt had increased 3.5% after months of declines. Credit card companies are projected to send out more credit card offers then the past year.

The industry is filled with a variety of credit cards. Secured, business, balance transfer cards are just a few with its own individual characteristics.

Balance transfer cards are essential cards that offer a period of low or zero interest rates for the cardholder. Though they can still be used for purchases, new purchases may involve separate interest rates.

The Capital One Platinum Prestige Credit Card is one of the better balance transfer card offered. The card gives its users zero percent interest on purchases and balances transfers up to May 2012.

Another card that offers 18 months zero interest on balance transfers and twelve months for purchases is the Citi Platinum Select MasterCard. The card carries an annual percentage rate of a variable 11.99% to 20.99%.

Secured credit cards help individuals with bad credit to improve their credit standing. In addition, those with no or little credit history can also use secured credit cards to establish one. The Orchard Bank Classic MasterCard is a good example of a secured credit card. The card carries an interest rate between 7.90 and 19.90% and is dependent on the cardholders credit score.

Some credit cards provide airline miles for using their card. An excellent card for earning travel rewards or airline miles is the Chase Sapphire Preferred Card. The card gives a free flight to cardholders who spend three thousand dollars within the first three months.

As a recent report indicated, the Credit Card Act of 2009 seems to be benefitting consumers. Senior researcher at the Center for Responsible Lending, Josh Frank commented, "People mistake higher rates on mail solicitations and other offers in the last year as a price hike. But the facts show that offers now just more closely match actual costs. Prices have been level, but borrowers have a much better picture of what those prices are."

59.9% APR First Premier Bank Credit Card Retired

Admin — Mon, 21 Feb 2011 00:00:00 GMT

First Premier Bank has recently removed its 59.9% APR MasterCard from its credit card offerings.

A message appears at the company's website stating: "The credit card you have shown interest in is currently not available." Additionally, First Premier's toll-free number will automatically respond, "The offer associated with this phone number is no longer available," when inquiring about the specific credit card.

A representative for First Premier commented that the card had reached its issuing limit for the month due to its popularity.

"Due to the high demand for this credit card, we have reached our monthly volume requirements and are not currently offering this product," she said. "Individuals are being asked to consider another offer at this time or they can check back with us next month."

In its place is a secured credit card with a more reasonable 19.9% APR. Secured cards allow consumers to build their credit by reporting payments to credit bureaus. However, secured cardholders must have a deposit with their accounts which acts as collateral for their spending limit. For this reason, secured card users are fundamentally charging against their own money. If a payment is not made to the bank, the deposit is used to make the payments.

The late 59.9% card was reddened with excessive fees. The card charged over one hundred dollars in fees a year and usually only extends a credit limit of about three hundred dollars. As of February, there were 300,000 active customers for the card.

The card was initially targeted to those with bad credit and originally charged an even higher 79.9% interest rate. The interest rate was lowered as many consumers simply ran up their bill and then did not pay.

New Credit Card Laws Aims For Transparency

Admin — Mon, 21 Feb 2011 00:00:00 GMT

According to a report released Wednesday, enacted credit card laws helps to make billions of dollars in charges more transparent for cardholders. This should help lower costs for consumers over the long-term.

The report was issued by the nonprofit research group Center for Responsible Lending. The study examines the effects of new federal credit card legislations on consumers one year after it has taken effect. These rules were mandated by the Credit card Accountability Responsibility and Disclosure Act of 2009 and are mostly in place.

More attention has been brought upon the Credit card Accountability Responsibility and Disclosure Act as the newly established Consumer Financial Protection Bureau is planning to evaluate its impacts on Americans.

Prepaid Debit Cards and Fraud Protection

Admin — Wed, 16 Feb 2011 00:00:00 GMT

Prepaid cards have become a popular payment option for many today. In fact, approximately seventeen percent of Americans have one. As more and more Americans strive to rid themselves of credit card debt, the popularity of prepaid cards is very likely to increase exponentially. However, individuals using prepaid cards should know that consumer protection and security benefits for prepaid cards are nowhere near the level of traditional debit and credit cards.

One of the fundamentals prepaid cardholders should understand is that consumer protection offered by prepaid debit cards are voluntary and can be revoked or revised by the issuer at any time. Prepaid cards and the funds loaded in them are not typically regulated nor insured by the FDIC. Although there are prepaid cards out there that are backed by the FDIC, it usually does not cover the full amount that needs to be recovered.

In addition, prepaid cards to not have the same statutory and regulatory safeguards for the recovery of your money in situations where your prepaid card is lost or stolen. Traditional cards will typically have a zero liability clause that frees cardholders from the financial responsibility of fraudulent purchases.

With prepaid cards, your liability is limited to up to fifty dollars if you report the card stolen within two business days. If the card was reported after two business days, you liability increases to five hundred dollars. If the instance is not reported within two months, the cardholder is liable for the full amount of fraudulent charges. With credit cards, you are only limited to fifty dollars no matter how long it takes you to report the stolen card.

Since consumers do not have the same leverage as with traditional credit cards, billing disputes are also more complicated with prepaid card companies. With credit cards, the federal law protects individuals by allowing cardholders to avoid making any payments until the disputed amount is settled. The finances have already been deducted with prepaid card transactions. The card issuer will not guarantee you get your money back nor even give you the option to dispute and resolutions.

Learn the Credit Card Lesson the Easy Way

Admin — Wed, 16 Feb 2011 00:00:00 GMT

Many are looking for advice in regards to efficiently improving ones credit score. Through irresponsible spending behavior or lack of recognition to debt issues, many have found themselves with a severely limited credit rating. For many, considerable damage has already incurred because their credit history is extremely limited while most of the information available is negative in nature. In order to rectify the situation, individuals will need to dilute this negative information with a pattern of positive usage. Obtaining a secured card is one way this can be accomplished. Those looking to improve their credit score can simply obtain one by placing a security deposit of around two hundred dollars to open the card, lock it away, and add to the deposit over time to increase their available credit.

Financial responsibility can be portrayed by simply not using the money available to a person. By having an open credit card account with a zero balance, individuals are showing creditors that he has an excellent zero percent credit utilization ratio. A low utilization ration can quickly improve one's credit score.

Those who have found themselves in credit card debt have several lessons to learn. Primarily, it's usually not a smart idea to open a credit card on impulse. Credit cards require a degree of discipline and fiscal responsibility to have and use. Secondly, if some find themselves facing debt, it is unadvisable for them to ignore the issue. Debt simply becomes more complicated and costly to deal with over time.

Jump in Fourth Quarter Profits for Visa

Admin — Wed, 16 Feb 2011 00:00:00 GMT

A jump in usage of Visa branded credit and debit cards was reported in the final three months of 2010. The increase in transactions fueled record profits for the world's largest payment processing network.

A notable increase in consumer use of Visa credit and debit cards resulted in increased profits for the company. According to the processing network's latest regulatory filing, Visa posted an increase in profits of $897 billion in the fourth quarter of last year. This was an eleven percent increase compared to the same fiscal period in 2009, and up from the $824 billion profit found in the three months prior to the last quarter.

Joseph Saunders, Visa chairperson and chief executive officer said, "Visa is in a strong position to continue to accelerate the migration to electronic payments, particularly in economies where cash and check remain predominant." He also pointed out the company's increased focus on mobile phone payments and other alternative forms of e-commerce.

The upcoming Federal Reserve Board rule to cap interchange fees on debit card transactions to just thirteen cents are expected to have profound impacts to the credit card industry.

Increased Black Market Demand on Login Information

Admin — Wed, 16 Feb 2011 00:00:00 GMT

According to researchers at Panda Security, cyber thieves have gone beyond simply selling credit card numbers. In a recently released statement, agents from the company's PandLabs unit disclosed information in regards to their newest probe into the online black market for consumer data.

Identity thieves typically use a group of anonymous bulletin boards and live chat sessions to traffic login information from customer's online banking and brokerage accounts. By placing their focus on personal information, cyber criminals can repeatedly compromise consumers' accounts. This can be accomplished even after the credit card numbers have been reported stolen. For this reason, stolen credit card numbers has a fairly low value in the black market, averaging about two dollars per number. On the other hand, login information for an online banking service can be worth as much as $700 in the black market.

In spite of this, investigators have also revealed some practices that could impede online criminal operations. Because the resale of consumer information has become so popular, novice criminals often buy accounts that have already been deactivated or reported stolen. For activities like large scale money laundering, seasoned criminals must still depend on some face to face transactions.

Jump in Credit Card Spending

Admin — Wed, 16 Feb 2011 00:00:00 GMT

A recent review released showed an increase in consumers use of credit cards. Even so, their spending practices remain cautious following the recession.

Leila Fourie, head of Standard Bank's credit card division commented, "Although the worst of the recession is over, South Africans are still cautious about spending on their credit cards, which they used conservatively during the festive season.”

The bank is said to be the largest credit card issuer in South Africa. Its recent review of credit card usage over the past months has concluded that individuals where reducing their balances while spending less on expensive items.

Spending on travel has fallen with consumers. Contrarily, the corporate sector showed a ten percent increase in airline expenses.

Fourie added, "In lower and middle income groups, consumer spending patterns were erratic during 2010. This changed from October with the bulk of transactions being recorded in department and clothing stores."

Higher income individuations also showed a reduction in travel spending. They primarily used their credit cards in retail outlets ranging from jewelry to department stores.

In response to reduced interest rates, consumers are ironically reducing their outstanding debt.

Fourie said, "It was evident that bank customers were using thirteenth checks and bonuses to pay down outstanding balances, rather than spend their extra income on luxuries."

She also suggested that many consumers are using debit cards and cash more often. "Consequently, fewer cardholders are defaulting on their obligations and the level of credit card bad debt is improving. Debt review, however, remains an industry concern," she added.

She also hinted that based on the report, increases in card spending volumes for the year is expected to be sluggish. She added, "While there has been a substantial increase in customers opening new credit card accounts at Standard Bank over the last twelve months, customers are using the product far more responsibly and are managing their debt more effectively."

Achievable Consumer Credit Debt Consolidation Strategy

Admin — Wed, 16 Feb 2011 00:00:00 GMT

A consumer credit debt consolidation plan may be an ideal solution for some to deal with the high interest rates on your credit cards. Though it is undeniable that credit cards makes our lives much easier, situations could change rapidly if a cardholder defaults in paying the monthly installments on time. Sometimes the debt amount can keep on escalating making it completely unmanageable. If this is the situation you find yourself in, you are more than likely to require credit card debt assistance. Fortunately, one can find an abundance of credit debt consolidation companies online that can help you explore the various options in debt relief.

Currently, there are varieties of credit debt consolidation options to help rid you of huge credit card debts. One option would be to use your home equity to secure a low interest rate loan to consolidate all your outstanding credit card debt. With such a loan, your home equity serves as collateral against the loan amount granted. Due to this fact, these loans can be established fairly quickly and securely.

For those who do not own a home, you could apply for a low interest rate home equity line of credit by using your assets like cars, share stocks, or jewelry as collateral. You can also apply for a card with lower interest rates than the ones you have now and transfer existing balances to the new card.

Whichever method you find more appealing, it is important to make an informed decision. Expert financial advice can be obtained from various debt consolidation firms. You should also verify the reputability and reliability of potential firms before asking for their help. A good debt consolidation firm will give you recommendations based on your unique financial needs and circumstances.

Educate yourself in regards to customizable low rate debt consolidation options. Nonprofit consumer credit counseling services are available for almost anyone in need.

Boosted Profits for MasterCard Amidst Increased Credit Card Usage

Admin — Wed, 16 Feb 2011 00:00:00 GMT

As consumers drastically increased their usage of credit and debit cards this fourth quarter, MasterCard Inc. reported a forty-one percent profit increase.

For the final three months of the year, revenue jumped eleven percent to $1.44 billion for the payment processing network. MasterCard earned $415 million, or $3.16 per share.

Compared to the previous year, purchase transactions increased eleven percent to $567 billion.

The number of transactions MasterCard handled jumped 6.3 percent to 6.2 billion. The company expects consumers to return to the use of credit cards as the economy is showing signs of improvement after the financial meltdown.

The company also reported a big hike in debit card usage as well. MasterCard was always behind in this category when compared to its largest rival Visa.

Wall Street had presumed a profit of $3.03 per share, on revenue of $1.43 billion.

Tips on Getting Out of Credit Card Debt

Admin — Wed, 16 Feb 2011 00:00:00 GMT

Vice president of Freedom Debt Relief, Kevin Gallegos suggests that it is time for Americans who resolved debt reduction in 2011 to stay motivated.

“One of the most popular resolutions every year is to get out of debt,” said Gallegos. “It’s no wonder: The average American household that carries credit card debt owes around $15,000. Indebted families and individuals should indeed work hard to stick to their resolutions to get debt relief.”

Many believe the key to achieving the goal of being debt free consists of several fundamental steps. Debt holders need to break down their goal into steps that are more manageable. They also need to be responsible for these goals and setup rewards for achievements.

The first step in getting out of credit card debt is to enact a spending plan you can follow. Writing down daily spending will be extremely valuable in doing so.

Gallegos also suggested to "prepare for success by taking the plastic out of your wallet". By using automatic bill payments and writing checks for bills, one can avoid using credit cards all together.

When dealing with credit card bills, it is vitally important to always pay on time. Regular and punctual payments can improve your credit score that will eventually lead offers with lower interest rates on loans and credit cards.

Besides paying on time, individuals should strive to pay beyond the minimum required payment. The more money paid each month, the time it takes to pay off the balances greatly decreases. Extra money can be earned by taking on extra work, selling unnecessary possessions, or applying money from a raise to pay off the credit cards.

Finally, if you still have difficultly conjuring up or following a plan, help is available. Debt consolidation services are available to combine your debt into a low-interest loan. People who face serious hardship can look at companies that offer debt settlement programs.

Gallegos said, "Persistence and patience are the keys to getting out of debt. Achieving any New Year's resolution requires determination and diligence, but in time, your efforts will pay off."

How to Handle Holiday Credit Card Debt

Admin — Wed, 16 Feb 2011 00:00:00 GMT

According to creators of the "Pay as You Settle" credit card debt resolution system, American consumers are just beginning to feel the full impact of their holiday shopping extravaganza.

Officials from Prestige Financial Solutions referred to the unease when Americans open up the first few credit card statements after the holiday shopping months. Amy Thompson, company founder, has three easy steps for consumers to follow in order to stay aware of their financial state.

Amy suggested that everyone should first gather up all their credit card statements into once place. They should then add up all the balances to get a better idea of how much they really owe as a whole.

After a total amount is figured, subtract a list of monthly household expenses from your monthly salary. The remaining amount would used to pay off the credit card balances.

If the amount seems overwhelming, individuals can consult a debt advisor or financial planner to look at long term options and goals. Consolidation loans, credit card counseling, or debt settlement programs are all options available through these organizations.

Thompson stressed the importance of screening potential financial advisors. A recent Federal Trade Commission investigations has reviewed a great many number of dishonest institutions in this field.

Credit Card Debt Increases

Admin — Wed, 16 Feb 2011 00:00:00 GMT

For the first time in over two years, credit card debt has increased in the United States. The increase in credit card balances is primarily due to strong holiday spending in December.

According to a Federal Reserve report issued Monday, the total credit card debt at the end of the year increased by $2.3 billion from a month earlier to $800.5 billion. This was the first increase since August 2008 -- which was just before the financial system meltdown.

Following the credit crisis, card balances generally reduced in size as American consumers began to pay off some of their debt. Overall credit card debt has decreased eighteen percent since August 2008.

The raise in credit card debt may also be an indication that consumers are increasingly more confident in the outlook of the economy as well as in their personal job security. During the fourth quarter, increase in consumer spending helped invigorate the economy at its strongest pace since last year.

On the other hand, increase in credit card usage can also indicate that Americans are short on cash and need it to support their necessities and spending. It could also be the case where individuals are using credit cards to fund the start of a new business.

Federal Reserve data also showed that general consumer debt--besides credit card debt--has also increased. Debts, which include student loans, auto loans, and personal loans, increased $3.8 billion from November. Non card related consumer debt also increased 1.7%.

Rewards Programs Jeopardized By Debit Card Fee Caps

Admin — Mon, 07 Feb 2011 00:00:00 GMT

Due to more stringent federal control over banking fees, banks have already eliminated free checking accounts to their customers in order to offset revenue loses. As congress continues to push limits on interchange fees to merchants, debit reward incentives may vanish as well.

Anticipated to go into effect this summer, the Federal Reserve Board’s proposed cap on interchange fees charged by credit card providers to no more than twelve cents per transaction will bring about vast changes in the financial sector. We can expect to see various changes proposed and committed in order to justify the decrease in profits the new rules will have on the industry.
On the first nine months of 2010, debit card usage increased by 14.6% compared to the same period a year before. This is according to a recent report conducted by the payment industry trade organization, The Nilson Report. The study also estimates that, at this rate, debit card transactions will increase to $2.7 trillion by 2015.

Certain banking lobbyists like the American Banking Association have suggested that increase federal restrictions aimed to benefit consumers may in fact backfire. Some have speculated that the added cost of these regulations may end up costing the consumer more in the end.

From data reported by ConsumerReports.org, nearly 65% of debit cards for the fifty top United States banks have rewards programs. However, due to these new restrictions, debit card rewards programs may be a thing of the past. According to Chase spokeswoman Christine Holevas, the bank has already decided to end its debit rewards program on February of this year. She had added that these programs were primarily funded by interchange fees in the past.

A spokeswoman for Wells Fargo commented, “Debit cards are an important product for Wells Fargo, consumers and the industry. The proposed rules were recently released and we will review and provide comments during the allotted time period. It is premature to speculate on the financial impact.”

President of Consumer and Small Business Banking for Bank of American, Joe Price said, “The regulations would harm consumers by increasing the cost of their everyday debit card transactions, limiting their payment choices, and impacting industry innovation.”

Citigroup spokeswoman Natalie Marin said, “If the final rules that are issued in April look like the draft, there’s no question that it will impact how we and other issuers price deposit and payment services and what features and benefits are included.” She added, “We are not making changes to our debit rewards program at this time.”

How to Get the Most Out of Your Airline Credit Card

Admin — Mon, 07 Feb 2011 00:00:00 GMT

As part of an industry wide effort to squeeze out more profit without raising fares, a large number of airlines have implemented new restrictions that would limit loyalty programs. Airlines such as Southwest and Qantas have recently joined this group with increased restrictions.

Here are some of the changes many frequent fliers should be informed about. One of the obvious changes would be mileage inflation. Many of the co-branded airline reward credit cards will offer fewer miles per dollar. Cardholders should also expect extended blackout dates for frequent flier travel bookings as well as a reduced number of award seats available for those with enough points. A few airlines are also moving up the expiration dates for frequent flier points and charging travelers a per-mile fee to reactivate these expired miles. Added and increased booking fees and upgrade surcharges should also be expected. Upgrade fees as high as $150 may be applied to certain reservations.

Though these changes are less than inspirational, there are still ways to maximize the value of your frequent flier points. Timing would be one way to better use your points. Scheduling a little air travel at critical moments could help you avoid expiring points since many airlines reset the clock on your miles after there is activity. Cardholders should also look into upgrading since they are often a better value for your miles than a flight purchase. With tighter expiration deadlines, consolidating your flight, airline reward credit card, and partner purchases into a single frequent flier program will yield the best results. Finally, the most obvious way to better reap travel reward benefits is to apply for a good frequent flier airline card in the first place.

Survey Shows Significant Credit Card Turn Down Rates

Admin — Mon, 07 Feb 2011 00:00:00 GMT

According to a recent survey conducted by TaoCredit.com, approximately twenty-five percent of individuals who applied for a credit card or loan during 2010 has had their application denied.

Through the study, young individuals were rejected most often by lenders. An estimated thirty-six percent of rejected loans and credit card applications where from people aged between eighteen and thirty-four. Participants over the age of fifty were only denied twelve percent of the time.

There were also gender differences in the statistics as well. Women were less likely to be denied compared to men. Twenty-eight percent of men had their applications rejected while only twenty-three percent of women were denied.

Being turned down for loans and credit cards can be detrimental to a person’s credit rating. The effects worsen with multiple applications being rejected.   Individuals should take simple measures before applying for loans and credit cards. Paying their bills on time and ensuring you are in the electoral register can increase your credit rating.

Head of banking at moneysupermarket.com, Kevin Mountford said, “It’s worrying to see such a huge number of people being rejected for credit cards or loans, especially as you could avoid being declined by taking the time to research the best card for their needs.” He added, “Rejected applications can have a damaging affect on your credit score and further reduce the chances of you qualifying for another credit product in the future.”

Thirty-eight percent in London had had an application to borrow money rejected during the past year. At the other end of the scale, applications for credit cards or loans for people in the West Midlands were approved eighty-five percent of the time.

FED Leaves Funds Rate Static

Admin — Mon, 07 Feb 2011 00:00:00 GMT

The Federal Reserve announced Wednesday that it is planned to keep lending rates at existing levels. The lending rate is also known as the federal funds rate and is kept within a range of 0 percent to .25 percent.

The decision to do so has also kept the prime rate at 3.25 percent. This is exceptional news for cardholders since most credit card interest rates in the United States are tied to the prime rate.

Uneventful Federal Reserve meetings are often beneficial to borrowers. Variable rate credit cards make up for the vast majority of current cards and card offers. Increases in fed fund rates will typically mean an increased APR for those carrying variable rate credit cards.

These historically low interest rates have been static for over two years now. Financial experts do not believe there will be drastic changes any time soon. The Federal Reserve will not tighten credit until there is a huge improvement in the economy and such measures are needed to ward off inflation. These indicators are not yet apparent.

President of Naroff Economic Advisors, Joel Naroff said, "The economy just hasn't changed. The stock market has gone up, but employment hasn't."

Michael Brandl, a professor of economics and finance at the University of Texas in Austin, does not believe the Federal Open Market Committee is worried about the threat of inflation. He added, "So don't look for any tightening for at least six months."

Credit Card Interest Rates Labeled Morally Unacceptable by Judge

Admin — Mon, 07 Feb 2011 00:00:00 GMT

Earlier this month, former Salem District Court presiding Judge Robert Cometta, ruled that Citibanks's interest rates were so outrageous that they should not be enforced. He was referring to a fifty-four interest rate charged to a Beverly woman by Citibank. Judge Robert Cometta then ordered that she would not have to pay interest rates over eighteen percent.

Salem lawyer Richard Wise hopes his decision will pave the way to an appeal that would change the credit card industry. Judge Robert Cometta is currently sitting by special assignment in Lawrence Superior Court.

Wise, who represented the Beverly woman, commended Judge Cometta for taking a stand. Though the ruling will not definitively influence the decisions of other judges, it would generate the much-needed attention to these cases.

Wise believed credit card companies had policies that are one-sided and fundamentally unfair to consumers. He said, "Have you ever tried to negotiate a credit card contract? The terms or the interest rates?"

He also suggests the banks are "gorging themselves" on the profits from credit cards, which exceed $225 billion a year.

"People were encouraged to use credit cards as a way of spreading out costs," Wise said. They used them to pay for necessities auto repair, college textbooks, even groceries.

"This dispute highlights an issue of national concern," Cornetta wrote, "mounting credit card debt and unregulated interest rates, which make paying that debt next to impossible."

"Merely because Citibank is able to charge interest premised on South Dakota law, which does not cap interest, (that) does not, however, mean Citibank can charge any interest rate," Cornetta wrote. "Citibank's interest rate must still comport with common law concepts of fairness such as unconscionability."

JPMorgan and Supreme Court Rulings

Admin — Mon, 07 Feb 2011 00:00:00 GMT

In a unanimous Supreme Court ruling, justices overturned a verdict by a United States appeals court in California that a class-action lawsuit filed against JPMorgan Chase & Co in 2004 could precede.

In essence, the Supreme Court ruled that JPMorgan did not have to provide written notice to its customers before raising credit card interest rates to account holders who defaulted on a payment. The lawsuit involves instances where current laws that prohibit such actions have not yet been implemented.

James McCoy was the lead plaintiff in the suit. Based on the suit, Chase Manhattan Bank had allegedly violated federal laws by increasing interest rates to James McCoy's credit card account after it was closed due to late payments.

JPMorgan Chase remained firm in saying that the card member agreement between McCoy and Chase had clearly indicated the conditions for maintaining a lower interest rate as well as the maximum interest rate they can impose if these terms were violated. In these contracts, Chase had explicit provisions that allowed them to increase interest rates for cardholders in default.

In reflecting the Federal Reserve Board's views, the Obama administration supported the decision and said the old regulations did not require credit card companies to provide prior notice before increasing interest rates due to default.

A nineteen-page opinion written by Supreme Court Justice Sonia Sotomayor acknowledged the rulings. In the statement she said, "At the time of the transactions at issue in the case, the regulation did not require Chase to provide McCoy with a notice before raising his interest rate up to a pre-set maximum amount following delinquency or default."

Huge Profits for American Express

Admin — Mon, 07 Feb 2011 00:00:00 GMT

Despite the growing number of consumers vowing to spend less on their credit cards this holiday season, one major credit card provider saw increased profits attributed by a rise in spending during this period.

According to American Express' latest regulatory filing, they earned a profit of $1.1 billion in the fourth quarter of last year, which can be attributed to a significant increase in consumer spending as well as a rapid decline in operational costs. The declines in costs are primarily related to defaulted accounts. The reported profit was a forty-eight percent increase compared to the same period one year prior.

American Express' U.S. Card Services division posted a seventy percent jump in net income from $413 million to $701 million a year later. Again, the profits can be linked to increased consumer spending and a sixty-eight percent drop in provisions for losses due to improved credit quality across the company's portfolio.

Even though most consumers said, they would use alternative methods of payment during this holiday season to avoid additional debt, most credit card companies saw an increase in profits due to a rise in consumer credit card transactions.

Is Your Credit Card Purchases Tracked by the Government?

Admin — Mon, 07 Feb 2011 00:00:00 GMT

Those concerned about airport screening procedures may be more alarmed to know that their credit card transactions could be monitored by the government as well. Individuals who believe that this could not happen in America can be deeply mistaken. After the attack on 9/11, the United States government has greatly increased their inquisitions in the privacy of individual Americans in order to better protect us from future attacks. However, with the revealing of some of these tactics, one could easily question their motives.

One individual that shows deep concern in the matter is the senior staff attorney at the Electronic Frontier Foundation, Kevin Bankston. His group was mainly responsible for persuading a New York court not to allow law enforcement to secretly trace cell phone user's activities. Bankston is less optimistic about the future of privacy rights in the United States.

In an interview, he commented, "We don’t know what’s coming next. Because of the extensive secrecy surrounding law enforcement and intelligence investigation practices, every new revelation is just that: a revelation, and often a shocking one. "

The concerns began with a ten-page document, which outlined the Fed's guidelines in prying on the financial records of Americans. The documents describes an act called "Hotwatch" which grants certain government officials the right to monitor real time credit card activities, hotel and airline reservations, car rental activities, cell phone calls, and debit card transactions. Based on these new rules, the Feds do not require warrants to obtain such information. Additionally, every hotwatch executed will be accompanied by a judge appointed non-disclosure order, so no one will ever know they are being watched. It is not known how many hotwatches have occurred since the act was approved.

Though some might argue that the act would only affect those breaking the law, Bankston had another opinion. "Every time we learn about what legal theories and investigative practices the Department of Justice has dreamed up behind closed doors, they are always more aggressive and invasive than we expected", he said.

New South Wales Households Shying Away from Credit Cards

Admin — Mon, 07 Feb 2011 00:00:00 GMT

Latest statics show New South Wales households are using their credit cards significantly less. Consumers have decreased their overall credit card debt by an astonishing twenty percent while also reducing the number of cards they carry. This all occurred during the busiest shopping season of the year.

The state's average level of credit card debt for Q4 is at $1,651. This is a twenty-one percent drop from Q3 of $2,103. Besides the drop in debt, New South Wales residents had also reduced the number of cards on hand from 2.1 to 1.8 per household.

The study indicated that the increase in debt awareness could primarily be attributed to the economic downturn. As a result, residents were increasingly cautious in spending their money. Approximately eighty percent of consumers were able to avoid using their savings this Christmas season.

Don Koch, chief executive of ING Direct commented, "It's great to see NSW households make such impressive inroads into credit card debt. The state's median card balance of $1,651 is below the national median of $1,773. The credit card clamp down is all the more compelling because it occurred in the pre-Christmas period when many households traditionally overload their credit card with festive season purchases."

He also added, "On the downside, only 44 per cent of NSW households are happy with their mortgage, and over one in four (26 per cent) home owners are thinking about refinancing."

Americans Continues to be troubled by Credit Card Debt

Admin — Mon, 07 Feb 2011 00:00:00 GMT

According to the latest report from credit reporting agency Equifax, a great deal of Americans continues to find themselves with credit card debt.

Despite the overall decline in other debt such as car loans and mortgages, the report indicated that an estimated eight hundred billion dollars is owed to credit card companies. Approximately fifty-four million American households carry credit card debt.

South Carolina ranks 25th in the United States for the amount of credit card debt owed. North Carolina ranks ninth domestically which amounts to approximately Twenty-two billion dollars.

Chris St. John of Carolina Wealth Advisors held that credit card debt is not so easy to avoid.

St. John said, "It's easy to justify to yourself, it's only 40 dollars, it's only 60 dollars, it's only a hundred dollars, and you just hand that piece of plastic, and you don't think about it until you actually get the statement at the end of the month, and then you realize 'What have I done?'"

He also understood that getting out of credit card debt could be a long and difficult process. John also had several suggested steps in beginning the journey towards being debt free. The first step of which was to understand where the credit card expenses are coming from and reduce or eliminate the source.

"Are they coming from the store, are they coming from Costco, are they from going out to eat, and then figuring out do I need to be going out to eat that many times per week," St. John cited as an example.

The next step would be to start paying off the credit cards with the highest interest rates first. Doing so will save money in the end. Debt holders should pay considerably more than the minimum payments required in order to pay off the debt within a reasonable period.

St. John said, "The process is like riding a bike. The first thing you do is get your bike out. Then you get on your bike, then you pedal. It's really one motion as you're moving but it's all individual steps."

Potential Credit Card Cost Increases

Admin — Wed, 26 Jan 2011 00:00:00 GMT

Financial experts believe that there would be increases in the cost of personal loans and credit cards when new unsecured lending rules are proposed next month.

Under the Consumer Credit Directive, which was proposed on February 1, credit card companies must offer the advertised interest rate on loans and credit cards to at least fifty-one percent of its customers. Current rules only allow lenders to offer rates that can be applied to sixty-six percent of its customers.

The Consumer Credit Directive also instructs card providers to provide consumers with more detailed agreements. It will also force lenders to carry out more thorough credit checks before they lend money or increase the level of credit available to existing customers.

Experts believe that these extra steps and measures will increase lenders' costs that will eventually be passed on to the consumers.

A credit cards expert at Think Money said, ""Credit card providers have to include their typical APR on their advertising, but many people don`t realize that this isn`t the rate everyone receives. The actual rate offered can depend on a number of factors, including the borrower`s credit rating.""

""This is just one reason why searching around for the right deal is important. Equally important is not just accepting the first deal you`re offered - if you`re offered a higher interest rate than anticipated, it might be worth waiting a while and looking elsewhere.""

Misleading Claims Enquiry for Credit Card Customers

Admin — Wed, 26 Jan 2011 00:00:00 GMT

According to a study conducted by Which?, credit card companies often give consumers false or deceptive information while they call in about their claims.

The consumer group conducted the study through undercover investigations. They found that 71 out of 120 telephone calls to the credit card providers ended up with no useful or correct advice about making a claim for items bought using a credit card.

In only ten of the associated calls were Section 75 of the Consumer Credit Act mentioned. Of those ten calls, only one researcher was given the correct money limits for claiming.

Some inaccurate information provided included Lloyds TSB informing a researcher to contact the Ministry of Justice, Barclaycard advised their local authority and NatWest suggesting pursuing a claim for an undelivered sofa through ATOL.

Based on the study, Nationwide and Tesco were rated especially bad in handling enquiries. Of the participating companies, HSBC scored well. Additionally, MBNA passed the test in seven out ten calls, which is the highest of the firms.

Peter Vicary-Smith, the group's chief executive, said, "It's not as if the rules on credit card claims are complicated." "The Industry must know the rules, and it shouldn't be up to the consumer to remind them of their rights," he added.

The consumer group is writing to each of the twelve credit card companies to provide suggestions in improving the information they give to their customers.

American Express Open SimplyCash Business Credit Card

Admin — Wed, 26 Jan 2011 00:00:00 GMT

The SimplyCash Business Credit Card gives five percent cash back on office supplies and wireless services and it currently being offered by American Express Open. The care also gives three percent cash back on gasoline purchases and one percent cash back on everything else. The SimplyCash Business Credit Card has no limits to the cash back points you can earn. Another excellent feature of the card is that you can have the earned cash back be deducted automatically from your monthly statements.

Businesses can also automatically save three percent to ten percent on their expenses with the Open Savings program on this business credit card. Simply make your business purchases from the companies listed in the American Express Open Savings program to take advantage of the benefits. The list includes airlines and hotels as well as services from companies like FedEx, AirTran, Barns and Noble, and Hertz.

The SimplyCash Business Credit Card also has a zero percent interest introductory for the initial six months, nine months, or twelve months based on your credit rating. There is also no annual fees for this credit card.

JPMorgan Wins Credit Card Court Case

Admin — Wed, 26 Jan 2011 00:00:00 GMT

In a lawsuit by credit card consumers accusing JPMorgan Chase & Co. of unfairly increasing interest rates after they went into default, the United Sates Supreme Court ruled in favor of JPMorgan.

The justices of the Supreme Court unanimously agreed that Chase Bank USA had the right to increase interest rates for James A. McCoy's without prior notification given Federal Reserve Board regulations of that time. The cardholder agreement for Chase had indicated that higher rates could be imposed due to defaults to the account. New Federal Reserve regulations prohibit this process.

Although the Federal Reserve changed the regulation in 2009 to require notification to defaulting customers, the Obama administration argued that companies before then did not have to provide notice.

Justice Sonia Sotomayor wrote, "Because the interpretation the board presents in its brief is consistent with the regulatory text, we need look no further in deciding this case.”

A decision to rule against Chase by the San Francisco-based ninth United States Circuit Court of Appeals has led to similar suits being filed in California against other banks.

Increases in Debit Card Fees for 2011

Admin — Wed, 26 Jan 2011 00:00:00 GMT

Consumers trying to avoid credit card debt may turn to debit cards as a viable alternative. However, due to renewed efforts from card providers to offset profit lost due to new government regulations debit cards may not be as attractive an option as before. Major lenders are expected to reintroduce or increase a number of fees associated to debit accounts, according to a report from the New York Daily News.

One of the fees, which are expected to be restored by lenders, is the minimum account balance fees. The fee penalizes consumers for not maintaining a certain amount in their checking accounts. Banks are restoring this practice to persuade consumers into using their credit cards more.

The Federal Reserve Board has recently released propositions to limit fees for transactions involving debit purchases. This policy was introduced towards credit card transactions not too long ago.

Debt Issues Caused by High Interest Rates and Poor Credit Loans

Admin — Wed, 26 Jan 2011 00:00:00 GMT

For many with poor credit, unsecured personal loans have been a method of choice. The high interest rates associated to these credit cards and unsecured personal loans can be a cause of many problems to these individuals. Already struggling to pay off a large amount of debt, individuals dealing with these personal finance issues might find the high interest rates difficult to bear.

Before anyone decides on any type of loan, it is important for that person to have an exit strategy. Because Americans failed to have this simple preparation planning, some are finding themselves deep in debt while others have ended up filing bankruptcy.

It is typically the case where a person's credit score determines the interest rate he or she will get in a bad credit unsecured personal loan. Lenders will determine the interest rate to apply during the applicants' credit check process. It is vitally important to know how this interest is compounded since interest rates can be as high as twenty-five percent.

This usually applies to those looking for a poor-credit credit card as well. As Americans continue to use their credit cards more and more for purchases, experts believe the trend can be disastrous for many individuals' financial future. This is especially the case for those without a healthy income.

Americans have plenty of free resources available online to help them better understand how to ease high interest rate debt. The FTC website is one of these sources.

How to Save and Pay Off Your Debt

Admin — Wed, 26 Jan 2011 00:00:00 GMT

Many who are fortunate enough to have access to a bit of extra money may be divided on how to properly spend it. Should individuals save the money or use it to pay off their credit card debt? This is a fairly common question and the answer typically depends on your current situation.

The first thing you should ask yourself before committing on a decision is; do you already have an emergency savings account? Even if we have mountains of credit card debt, it is still vital for each individual to have an emergency savings account. Individuals should not rely on credit cards and other sources of loans to be there in emergency situations. A three months worth of expenses should be accumulated and stored away for these specific times. Those who do not have an emergency fund should allocate any extra income to establishing such an account.

To make a proper decision in allotting extra income, one should also calculate the cost of their debt. This simple procedure is often overlooked by many debt bearers. Simply do so by adding up all the loans you still owe and the interest rates associated to each. This figure will be used in the next step to determining where to allocate your funds.

Next, you would decide where you would assign these funds if you were to save up the extra income. If you plan to put the money in a savings account, figure out the interest earnings you will receive by doing so. Investing in a money market fund would be more difficult to calculate, but given current financial situations, it would be difficult to earn more than one or two percent without taking additional risks. Simply write down the total amount of cash in question, and multiply it by the rate of return.

Both figures will be used to make the final verdict. If you will get more of a return by saving or investing your money, that would be your ideal choice. On the other hand, if your debt expenses are greater than any earnings you will receive by saving or investing, then that person should use the extra funds to pay off the debts.

Americans Carry Billions in Credit Card Debts

Admin — Wed, 26 Jan 2011 00:00:00 GMT

According to Equifax, a majority of American households still carry a considerable amount of debt. Their recent studies have concluded that some individuals pay as much as seventeen percent of their monthly income to pay for their credit cards alone.

The states most plagued by debt are Florida, North Carolina, Ohio, Texas, Washington, and California in that order. Individuals living in these states had the highest average credit card balances in the country.

Even though the total amount of debt consumers owe has declined 8.2 percent from its peak in October of 2008, American consumers still owe more than $800 billion in credit card debt.

"The good news is we're seeing Americans paying off their debts and becoming more fiscally fit," said Equifax's senior vice president for corporate communications Dianne Bernez. She also added, “However, the numbers show that while people’s intentions are good, Americans still have a lot of debt to tackle and often don’t know where to start.”

Both Equifax and financial expert David Bach have initiated a "Debt Free Challenge." The goal is to have one million Americans to pay off one billion dollars in debt.

Bach is the author of the book Debt Free for Life: The Finish Rich Plan for Financial Freedom. He said "I would encourage people to look at these numbers and then take a good look at what their share is – a lot of people don’t actually know how much debt they’re in,” and “Only then can you make a plan of action to pay down your debt.”

Bach also added, “Pledging to get out of debt can really help people get started on their journey toward financial freedom – setting a goal helps you stick to your plan.” He said, “And remember that you’re not alone – taking the pledge are your neighbors, co-workers and friends – this is doable and there are tools out there to help you.”

Return of the Balance Transfer Offers

Admin — Wed, 26 Jan 2011 00:00:00 GMT

Before the recession, low or zero interest balance transfer offers are frequent and abundant. When the economy finally reached its all time low, financial analysts had predicted the end of these balance transfer offers.

Balance transfer offers are effective methods for credit card providers to attract new customers. Moreover, with the economy on the rebound, credit card companies are now extending these offers again to entice potential clients.

A survey conducted by TaoCredit.com evaluated thirty-eight cards that advertised balance transfers. A similar survey conducted by the Safe Credit Cards Project at the Pew Charitable Trust shared a similar conclusion in that low balance transfer offers are returning.

Though these offers may seem tempting, potential applicants should carefully consider the positives and negatives of these zero balance offers. People like Ardie Hollified, project manager with Pew Health Group pointed out that these offers "have a floor but no ceiling." Among the researched banks, ninety-nine percent of them had a minimum balance transfer fee while only one percent had a maximum fee.

Reading the fine prints before taking up on a balance transfer offer is vitally important. It is almost always the case where interests rates become extremely high after the promotional period has expired. Additionally, most credit card providers now charge fees for the transfer process. In fact, of the thirty-eight offers evaluated by TaoCredit.com, only one did not charge such a fee.

It is important for consumers to carefully evaluate the offers before applying for a card. These offers are only beneficial if you can pay off the remaining balances within their promotional APR period. Additionally, if you continue to use the card after the initial transfer, you may easily find yourself in greater debt.

Higher Fourth-Quarter Profit for American Express

Admin — Wed, 26 Jan 2011 00:00:00 GMT

American Express claimed higher fourth-quarter profits after record customer spending during that period. In a statement issued by the biggest credit card issuer by purchases, American Express showed a net income increase of 48 percent to $1.1 billion.

American Express' success is mainly attributed to its Chief Executive Officer Kenneth I. Chenault. Chenault managed to keep the company profitable throughout the recession while having the lowest reported defaults and delinquency rates among the six largest credit card giants within the United Sates. Chief Financial Officer Daniel T. Henry said in a conference call with analysts, "Billed business continued to be strong. We are outpacing the growth of our major competitors."

American Express shares increased 6.7 percent this year. This included a charge of $74 million associated to job cuts. United States card income increased seventy percent and international card income jumped forty-eight percent.

In a statement, Chenault said, "Credit indicators strengthened and the amount we needed to set aside for problem loans declined significantly. Unemployment levels and housing remain a concern, but other aspects of the economy continue to show signs of improvement."

American Express controls the market for wealthier customers. AmEx customers spend three to four times more than those using MasterCard Inc. and Visa Inc. credit cards. On the average, American Express cardholders spend $8,414 in 2009. For comparison, MasterCard and Visa card users spend $2,641 and $2,217 respectively.

What's New for Credit Cards in 2011

Admin — Mon, 24 Jan 2011 00:00:00 GMT

An uprising of new credit cards is coming in 2011. Significant changes to the credit industry can be attributed to new technologies, less stringent lending practices, and tighter government regulations. For those careful consumers, these changes may bring about opportunities to greatly lower their monthly expenses.

With the economy rebounding, credit card offers are filling the mailboxes once more. According to market researcher Synovate, credit card mailings doubled from the previous year. Lucrative offers continue to be abundant for individuals with a strong credit history.

Due to new government regulations, late fees are capped at twenty-five dollars, interest rates cannot increase without warning, and monthly statements must be more transparent in disclosing balance information.

In the new year, consumers can expect more generous balance transfers. Many card issuers are extending their zero interest promotional periods to about a year. Balance transfers fees have also been reduced from five percent to three percent.

On a darker note, consumers can also expect higher credit card interest rates for the year. The average interest rate on credit card offers is 14.4 percent. This is almost a three percent increase from a year before. New government regulations prohibit card companies for increasing rates the first year of an account. As a result, issuers are raising rates before you apply for the card.

Preventing Unauthorized Credit Card Use

Admin — Mon, 24 Jan 2011 00:00:00 GMT

It is common knowledge that credit cards can be an easy road leading to debt. Besides worrying about overspending, cardholders should be wary about keeping their credit card information secure as well. Here are some tips to keeping your information out of the hands of credit card thieves.

Online purchases can be a safe and pleasant experience for everyone. When making a purchase online, consumers do not have to hand over important credit card information to any person. Even so, specific cautions should be taken when shopping online. Make sure, when it comes to paying for a purchase that the website is secure. The best way to avoid scams online is to stick with a trusted merchant.

Particular attention should be placed on phone purchases. Understanding and know the firm or organization you are dealing with is vital before offering credit card information over the phone. Phone purchases are the least secure way of making a purchase and should be avoided if possible.

Mail order forms often accept credit cards as well. This may not be the most secure way of using a credit card. An unauthorized person can easily have access to your credit card data if your mail gets lost. If a mail order purchase cannot be avoided, make sure your credit card information cannot be read through the envelope.

When making a payment at a retail outlet or restaurant, make sure you try your best to keep your credit card in view. Credit cards can also have security benefits over debit cards. Should you get unauthorized charges, you are only liable for no more than fifty dollars with a credit card.

Finally, keeping good records is vital when dealing with credit cards. Carefully monitoring credit card transactions can help you determine unauthorized charges quickly.

Chase and Citibank Deletes Foreign Exchange Fees on Certain Cards

Admin — Mon, 24 Jan 2011 00:00:00 GMT

In the past, foreign exchange fees ranging from two to three percent plagued major brand credit cards such as American Express, Visa, and MasterCard. In fact, the only credit card that does not charge fees for foreign purchases are the Capital One cards.

CitiBank has introduced a series of credit cards without foreign exchange fees. Citi released and couple of cards, basic and preferred, in order to simplify its lineup of rewards-based ThankYou credit cards. All these cards do not charge a foreign currency conversion fee for oversea purchases. The cards also do not carry an annual fee and conversion rates are lower than those associated with exchanging cash.

In the previous month, Chase also dropped foreign currency fees on their cobranded cards with Hyatt, Intercontinental Hotels, and British Airways. Significant annual fees are usually associated to these cards.

Those who do not wish to apply for a new credit can look to credit union debit cards as an alternative. These debit cards are treated as a Visa card by overseas operators for all purchases and currency exchanges. Credit union debit cards typically charge one percent for foreign exchange. Although this may seem like a good deal, a certain reader rightly pointed out, "The only exception is for car rental, where saving the cost of insurance using a regular VISA card far outweighs the 3% transaction charge."

Local Purchases and New Credit Card Rules

Admin — Mon, 24 Jan 2011 00:00:00 GMT

Based on new credit card rules aimed to prevent credit card fraud, customers of La Plata Electric Association will no longer be speaking to a person when paying their bills by phone.

Chief financial officer for La Plata Electric Association, Dennis Svanes said, "Our members will need to interact with a computer, and we know this is not always popular with people, but we have no choice"

However, customers may still speak with a real person for other service related matters.

The new requirements are not mandated by law but are set by the Payment Card Industry Security Standards Council as a set of worldwide security standards. The council consists of representatives and credit stakeholders from the five major credit card companies.

The new standards were formed in an attempt to reduce identity theft and credit card fraud. LPEA spokesperson Indiana Reed suggested the rules have persuaded some companies to fade out human interaction with regards to personal credit card information.

Companies like LPEA were forced to implement an automated system for taking telephone payments. Svanes said the changes will only affect customers paying by phone and encourage them to pay their bills online instead.

To meet the latest requirements, Svanes said LPEA was forced to implement an automated system for taking telephone payments. The changes will affect only customers who pay their bills by phone, Svanes said, and the company is encouraging customers to pay their bills online or through an automatic billing arrangement.

Due to the complexity of the standards, many businesses rely on companies like Mercury Payment Systems to process their credit and debit card transactions and to help them comply with new rules.

“The success of our merchants, partners and our own business relies on knowledge of, and compliance with, the continuously evolving card data security-related mandates and legislation,” said Mike Lambert, director of developer support. “Mercury provides PCI DSS-compliant processing solutions, but merchants are still responsible for adhering to PCI DSS requirements in their own retail environment. This includes security management, policies, procedures, network architecture, software design and other critical protective measures.”

Four Steps to Avoid the Credit Card Trap

Admin — Mon, 24 Jan 2011 00:00:00 GMT

The convenience of using a credit card is undeniable. However, they can also be a source of financial worries and an easy method of debt accumulation. This is so because using a card can easily detach a consumer from the actual money involved with the purchase. Paying the five percent required each month is also fairly effortless. Typically, if you carry your balances over for two to three months, you are most likely falling into a debt trap. There are four proven ways that may get you out of this financial dilemma.

The first thing a cardholder in debt should consider is to freeze spending using a credit card. Forcing yourself to use cash may have you think twice before making any unnecessary purchases. If using cash is not an option, a person can consider getting a debit card. The goal here is to not use a credit card until you are completely out of debt.

The second step is to convert your credit card bills to EMIs. EMI's will typically have interest rates ranging from fourteen to sixteen percent, as oppose to credit cards which may have interest rates as high as forty-two percent. Banks will usually agree to transfer your debt to EMIs because it makes it more likely for them to recover their dues.

Another way to get yourself out of credit card debt is to liquidate assets and redeem some of your previous investments. Reaping on benefits from investments that earns you ten percent in a year will not cover the expense of debt that is costing you two to four percent a month.

The final advice for those in debt is to start paying off credit cards that are the costliest. Target the card with the highest interest rates first. When this is done, the rollover cost will decrease in time.

Increased Competition Among Credit Card Providers

Admin — Mon, 24 Jan 2011 00:00:00 GMT

Increased competition in the credit card market can mean better deals for consumers. With purchases at record highs, many credit card providers are extending their balance transfer promotional rates.

The average length of balance transfer offers are now approximately sixteen months, according to a study conducted by Moneysupermarket.com. This is an increase of a month compared to the beginning of 2010.

Then again, the same study also showed the average standard rate on credit cards has increased .85 percent. At the same time, rates for cash advances had increased 1.27 percent.

Head of banking at the price comparison website, Kevin Mountford suggested, "Anyone transferring a debt on to a balance transfer card should aim to pay off that debt before the promotional rate expires."

What Money Can't Buy

Admin — Mon, 24 Jan 2011 00:00:00 GMT

Credit card benefits are not limited to cash back offers, free interest shopping, and reward points. Have a good credit card history can help you obtain a higher credit score. This score will, in turn, help you get a descent interest loan or mortgage.

Typically, the higher your credit score, the lower your interest rate offer. In some instances, certain banks only loans to individuals with a descent credit history. Head of retail assents at Dhanlaxmi Bank, Arvand Hali said, "After the 2008 downturn, it has become an important filter in disbursing loans."

Having a good credit card payment record can also help in other ways. When making a larger purchase with a card, some banks may offer to covert the payment to EMIs. Cardholders should be aware of the associated processing fees even though typical interest rates are not very high.

Other banks attract good credit customers by offering balance transfers at very low interest rates. An industry expert added, "It is an easy way to get customers acquisition tool for banks and translates into real benefits for the customer. A bank will offer you a low rate of 1% per month for 3-6 months. Some banks don’t charge interest on the transferred balance for 1-3 months. "

Though these offers may seem tempting, it only provides temporary relief for financial situations. Constant balance transfers will only put individuals deeper into debt.

A responsible and careful consumer can use his credit card statement to plan his expenses. Some credit card companies will give you an overview of your spending habits listed into categories. "Customers can analyze their usage and rebalance their spending patterns. It can help them in budgeting,” says Sandeep Bhalla , business head, Credit Payment Products, Citibank. Ultimately, your credit card can provide several advantages for you that money cannot buy.

How To Avoid New Bank Fees

Admin — Mon, 24 Jan 2011 00:00:00 GMT

Banks across the country are adding new fees and raising existing fees on a wide range of services. Those who do not familiarize themselves with these changes may find it an unpleasant surprise. There are methods in avoiding these new and added fees.

The increases can be attributed to many factors. Bank's bad decisions to extend credit had caused a great deal of defaults in the past years. As the housing market bubble burst, millions of Americans walked away from their mortgages because their homes were no longer valued the same as they were when taking up the loans. There are currently four million homes in foreclosure.

The CARD Act, which was enacted by Congress, also implemented changes to the industry that affected the profitability of credit card companies. The legislation sets conditions for over-limit fees, the minimum length of time consumers must get to pay their bills on time, and prohibits issuers from signing up anyone under age 21 unless certain conditions are met. All these influences the revenue generated by these credit card issuers.

One of the easiest ways for banks to recuperate the lost in revenue is through checking account fees. This is so effective because there are such a large percentage of people who have checking accounts. Understanding the current rules implemented by your banks is critical in avoiding these fees. Some banks have begun charging a monthly fee for a checking account. Alternatively, others may offer free checking only if do not use a human teller. Knowing the specific circumstances of your account policies can help you avoid some of these fees.

List of 2010's Best and Worst Credit Cards

Admin — Mon, 24 Jan 2011 00:00:00 GMT

According to TaoCredit.com, the PenFed Platinum Visa card is among the highest ranked credit cards available for 2010.

TaoCredit.com has recently released what they believe to be a list of best and worst credit cards in 2010. The credit card comparison site scored available credit cards on the basis of high interest rates, fees, and a lack of disclosures. Desirable cards were those showing value, good service, and convenience.

One of the cards nominated for being the worst credit card of 2010 was the First Premier MasterCard. With an astonishing APR of 79.99%, it had the honor of being the highest interest rate card for the year. Another card, which saw a bit of skepticism, was the short-lived prepaid debit card endorsed by the Kardashians. This was reported to be the most hated card of the year.

Both the PenFed Visa Platinum Cashback Rewards card and the Fidelity Investment Rewards American Express were rated the best cards in the cash back category. Additionally, the Capital One Venture Rewards credit card and PenFed Premium Travel Rewards American Express card were ranked the top in the travel and airline credit card category.

In the meantime, the Discover More card and the Citi Platinum Select MasterCard were referred to as the best low introductory rate credit card. The title of the best low interest rate cards goes to Simons Visa Platinum and the PenFed Promise Visa.

TaoCredit.com awards the best reward point credit card to Zync from American Express and the Chase Sapphire card.

First Credit Card News for 2011

Admin — Wed, 19 Jan 2011 00:00:00 GMT

A research firm has suggested that by 2012, a new technology will be available that will allow phones to replace the traditional credit cards in making purchases. Essentially, if you misplaced your phone, you have lost your credit cards as well.

The technology is being tested with two hundred Wells Fargo Employees beginning this month. The San Francisco based employees will test out this innovation by simply inserting a SD card device into their phones.

Many major phone carriers already have plans in place to provide this innovative technology with new phones. It is expected that full implementation of this technology would be slow and will take approximately five years.

The obvious drawbacks in using your phones as replacement for credit cards are such acts as losing your phone. The proposed testing period hopes to help developers determine ways to improve on such technology.

Therefore, credit cards may be a thing of the past. Like eight-track tape or cassettes, credit cards may give way to newer payment methods.

Mixed Blessings with New Credit Card Laws

Admin — Wed, 19 Jan 2011 00:00:00 GMT

With new government regulations, credit card companies are now mandated to give a credit score alert to consumers who are offered an interest rate that is higher than the average individual gets. Card providers can alert their customers using the two following methods.

Lenders can send every applicant a complimentary copy of their credit score used to make the lending decisions along with information on how the score compares to other applicants. They must also provide individuals instructions on how to contest this information as well.

Another path, credit card companies can choose, is to simply provide applicants a written notice explaining why they are being charged a higher interest rate due to their credit score.

Many financial experts believe the first method would be the only adopted by most large banks. Because the process is routine and requires very little case-by-case decisions, credit card providers might find it beneficial to go that path. Consumers may also prefer this method due to the free credit score they will get.

As a result of the Durbin Amendment to the Dodd-Frank Act, many banks have also seen a significant cut to their revenue. Consequently, the lost in profit also means a cut in program expenses to lessen the impact. These programs include free checking accounts, which were extremely popular among lower income consumers.

Adding to the credit card provider troubles is the Federal Reserve's proposed cap on interchange fees. These planned regulations would limit swipe fees for debit transactions to twelve cents per transaction. Credit card interchange fees are expected to remain unchanged.

Decreased Credit Card Usage, Increased Student Loans

Admin — Wed, 19 Jan 2011 00:00:00 GMT

As American jobless rates remain high and home values remain low, many consumers are holding back on using their credit cards this November.

According to the Federal Reserve's monthly consumer credit data, consumer borrowing of revolving credit debt continues to fall twenty-seven straight months in a roll.

The Friday report also indicated that consumer credit outstanding increased 0.7 percent or $1.3 billion to $2.4 trillion. The unforeseen increase was attributed to growing student loans.

A survey conducted on economists by Dow Jones Newswires showed that consumer credit levels were expected to remain stagnant during the month of November. The Fed showed consumer credit increased 3.5% instead of the anticipated 1.7%.

The increases followed a twenty straight month decline of consumer credit which can be attributed to charge-offs by banks on bad loans and tighter lending practices due to the recession.

As unemployment remains high and home prices continue to fall, Americans have been reluctant at spending frivolously. Consumer spending plays a significant part in the United States economy.

In November, it is reported that revolving credit fell $4.2 billion to $796.5 billion. This is a 6.3% fall from the previous month. In fact, the last time there was an increase was back in August 2008.

On the contrary, nonrevolving credit jumped 4.2% in November. This equated to a $5.6 billion increase to $1.61 trillion. This is so as federal student loans continue to rise. The increase can be attributed to recent legislations from Congress, which allows the government to be the primary lender to students rather than backing private loans.

The report does not factor in the numbers on real estate-secured loans or home mortgages.

Increased Credit Card Fraud Prevention from Visa

Admin — Wed, 19 Jan 2011 00:00:00 GMT

As a testimony of Visa's continuing effort to prevent credit card fraud, they have added an additional security feature to their credit cards.

After a radical revamping of their fraud detection software, Visa believes they can more easily spot credit card scams. The changes involve adding new elements and increasing the number of factors considered before flagging a potential compromising of an account. The changes were announced early January but were implemented well before the holiday shopping season in September.

It is also suggested that fraud cases are more easily noticed based on the new system. This is particularly so with fraud attempts originating overseas. The current detection software factors in distances between purchases, the time of day, how quickly transactions are made, and the type of stores processing such transactions. With the previous system, Visa only takes into account two of these factors simultaneously.

As con artists become more sophisticated and skilled at their craft, credit card providers are increasing security measures to compensate.

Credit Cards for Young Individuals

Admin — Wed, 19 Jan 2011 00:00:00 GMT

Industry experts have suggested that young individuals tend to look for credit cards with low interest rates.

Janine Williamson, senior adviser at William Buck, believes that these people need to be aware of the reward programs offered with these credit cards as well. Janine also said, "If you are not using the credit card enough, the cost of the program and higher interest rate are unlikely to be offset by any rewards." She also suggested that loans used for investments should be kept separate for different purposes. This will end up with less confusion.

Williamson added, "Combining a personal load and a share portfolio loan can become a mess for you and your accountant at tax time."

To make managing debts a little more effortless, those unpaid debt should begin saving up for the pay off. This is according to Andrew Clouston, general manager at Club Financial Services. Doing so would additionally improve a person's credit score, which would make it easier for that person to obtain a mortgage with reasonable rates.

Mr. Clouston also advised individuals who are in financial difficulty to take out an additional loan to consolidate all their debt. If successful, the other credit services must be cancelled. In addition, young individuals should start planning for future objectives a good five years in advance. Certain objectives such as a wedding, car, or trip should be taken into account.

A financial analyst at research group Canstar Cannex, Mitchell Watson also recommended that young people should clear out their credit card balances on a regular basis in order to stay out of debt.

Alarming Increase in Credit Card Debt Levels in the UK

Admin — Wed, 19 Jan 2011 00:00:00 GMT

According to a survey conducted by YouGov, there is an alarmingly dramatic increase in consumers using their credit cards to pay off their mortgage or rent. During these tough economic times, the research concluded that over two million individuals in the United Kingdom and 287,000 people in Yorkshire have had to make such difficult decisions about their personal finances and household bills.

Based on the survey, approximately seven percent of people in Yorkshire confessed to have used their credit cards to pay their rent or mortgage in the previous year. This is an increase of three percent since a comparable survey conducted a few months earlier.

YouGov also issued a warning to those participating in such financial practices. Since defaulting on payments could result in repossessed homes, those using their credit cards to pay for rent and such may be putting themselves and their family in jeopardy.

"This research brings into sharp focus how keeping a roof over their head had become a daily struggle for thousands across Yorkshire," said Campbell Robb, chief executive at Shelter. He also added, "This is a totally unsustainable situation and one which we fear could see many more families pushed into the spiral of debt, eviction or repossession and ultimately homelessness."

November Marks an Increase in Consumer Credit

Admin — Wed, 19 Jan 2011 00:00:00 GMT

According to the latest monthly statistics from the Federal Reserve Board, consumer credit increased $1.3 billion in November as more people seek nonrevolving credit. This is a 0.7 percent jump from October. Nonrevolving credit, such as loans for education, homes, etc. increased to nearly $1.61 trillion while the amount of revolving credit associated to credit card debt fell 6.3 percent to $796.5 billion.

The report also indicated that the increase was attributed to a greater number of consumers borrowing money from the federal government. As more consumers seek, student loans and the like increased to $315.7 billion. This is a notable increased from $312.1 billion in October the same year.

Based on the report, revolving credit has been dropping significantly ever since the beginning of the recession. Revolving credit has dropped a minimum of 7.3 percent each quarter of 2010 and had fallen almost $100 billion since the third quarter of 2009. On the contrary, nonrevolving credit has increased every three months since the fourth quarter of 2009.

As consumers increase their spending during the holiday season, November saw the smallest decrease in credit card debt compared to recent months. Tough the majority of consumers still choose to use debit, cash, and other forms of payment as oppose to taking on more debt.

Debt Assistance with Credit Card Debt Consolidation and Relief Programs

Admin — Wed, 19 Jan 2011 00:00:00 GMT

As times continue to be tough for everyday Americans, debt relief and consolidation programs continue to be a positive aspect during a time of government bailouts and economic uncertainty.

Credit card debt relief programs, debt consolidation, debt settlement, and credit counseling are strong and successful ways to help small business and consumers to consolidate or lower debt and to establish a guideline for getting out of debt the quickest and effective way possible.

With debt consolidation, several debt payments are combined into a single monthly payment sum. In certain situations, debt consolidation involves getting a new loan to pay off existing debt. With other scenarios, debt consolidation involves a debt management plan in which payments are managed without the need to take out another loan.

On the contrary, debt settlement programs involve service providers helping business or individuals negotiate an amount that would settle outstanding accounts. The amounts are typically much less than the original amounts owed and results in huge savings. Debt settlement programs are increasing in popularity since the end results usually benefits both the creditor and the borrower.

Government programs are also available for those struggling with financial problems dealing with federal student loans or their mortgages. Entitlement programs such as Medicare, Social Security, Food Stamps, and Medicaid are also available to those in needs.

Beyond these methods of financial assistance, bankruptcy laws are also here to help those in debt by liquidating assents and establishing a payment plan. Those considering bankruptcy should seek legal advice for such proceedings since it is often a complicated matter and process.

Lobbying Efforts of Credit Card Giants

Admin — Wed, 19 Jan 2011 00:00:00 GMT

MasterCard showed an increase in lobbying charges as the rest of the credit card giants, (Visa, American Express, and Discover) reported a decline for the third quarter of 2010.

Visa lobbied the Federal Reserve, Federal Trade Commission, and Congress for various issues regarding interchange fees, credit card regulations, and the creation of the consumer protection agency.

American Express involved the Treasury and Energy departments, the Postal Service, the Internal Revenue Service, the Treasury and Energy departments and Congress on credit card reform law, which included gift card issues and card practices for small business. Lobbying issues for American Express included online data collection, card interest rate caps, tax laws, online behavioral advertising and mail delivery.

During the same period, MasterCard contracted the federal government in regards to consumer financial products regulations, online payments, internet-based card purchases, interchange fees, internet gambling and data security. Generally, MasterCard lobbied the Federal Reserve, Congress and the Treasury Department.

Discover involved the Senate and the House of Representatives on issues related to regulation of fees charged to merchants for processing transactions, financial regulatory overhaul and credit card lending.

The Credit Card Accountability, Responsibility and Disclosure (CARD) Act of 2009 laid down various regulations that would limit the fees charged to customers by the credit card industry.

The Dodd-Frank Act, which was signed in July 2010, further capped interchange fees that card issuers charge merchants for accepting their cards as payment.

How to Build Credit

Admin — Wed, 19 Jan 2011 00:00:00 GMT

Having the absence of a credit history can be just as negative as having bad credit. Establishing good credit can take some effort and planning.

It use to be young individuals starting out can be an authorized user of their parent's credit card account and share card payment history. This option is no longer available, requiring an individual to be the main cardholder in order to establish any credit history.

Store card can be a good option for those starting out. They are much easier to obtain but usually carries a lower credit limit. Begin by making small purchases with your store card and pay off the balances in full every month. Doing so will help you avoid interest payments and allow you to quickly establish a good credit presence. Keeping up with the practice, and you will find yourself riddled with major credit card offers in a matter of months.

When applying for new cards, it is important to analyze the fine print. Promotional 0% interest offers are abundant but are not without its conditions. Introductory credit card offers typically lasts six months. After which interest can reach as high as 20 percent.

Another method to establish a credit history is through secured credit cards. Secured cards are backed by funds already in your bank account. When looking for a secured card, make sure you find one that reports your transactions to the credit reporting bureaus. Those that do not are relatively pointless in building credit. The same philosophy applies to secured cards as well. Avoid carrying a standing balance and pay off all transactions each month.

There are three major credit bureaus. Experian, Equifax, and TransUnion all reports them in a similar fashion with scores ranging from 300 to 850. Typically, a score over 720 is needed to secure a loan with ideal interest rates.

Check your credit card statement for false double charges

Admin — Mon, 10 Jan 2011 00:00:00 GMT

Lloyds Banking Group has verified that thousands of debit and credit card users were mistakenly double-charged on New Year's Eve.

With the large volume of transactions during that period, over 200,000 people are expected to be affected by the error.

The technical error can be attributed to issues to the payment processing service provided by Lloyds TSB Cardnet. The error is predicted to have affected a large number of users with various bankcards.

It is reported that retailers experienced a systems error with wireless terminals used to deal with card payments.

One example of the error was an individual who used his Tesco Mastercard to pay for a dinner during the New Year celebration. After reviewing his statement, he had found two identical transactions posted on the 3rd and 4th of January. The associated restaurant is already contacting its customers to inform them of the double charging issue.

A public apology was posted by Lloyds Banking Group on BBC News. Lloyds attributed the issue to technical error affecting "certain payments for card holders to some merchants".

It also said, "Duplicated transactions have been reversed and card holders are being reimbursed."

A telephone helpline has been setup. Lloyds suggests cardholders suspecting that they have been double charged should contact Lloyds immediately. "We will consider all reasonable and evidenced requests for reimbursement," it said.

Changes in credit card rules

Admin — Mon, 10 Jan 2011 00:00:00 GMT

A new set of credit card rules introduced this New Year, aims to help cardholders avoid being surprised by sudden increases in interest rates.

Based on these regulations, credit card issuers are mandated to provide a cardholder sixty days prior notice before increasing interest rates. Consumers will the option of rejecting or accepting these increases during that period.

The new rules also allow a person's monthly payments to pay off the card with the highest interest rates first. This will allow the borrower to more quickly pay off their balances.

The changes are deliberate, and were the latest attempt from the government to encourage fair treatment of cardholders.

Credit card companies assessed the changes may cost them £600m a year.

In brief, the changes affect cardholders the following ways;

Users can reject increases in their interest rates.
Have the right to get counseling in regards to their debts.
Payments will be applied to the debts with the highest interest rates first.
Cardholders will be provided more payment choices.

Unsecure Personal Loans on the Rise

Admin — Mon, 10 Jan 2011 00:00:00 GMT

As credit card providers tighten credit requirements, banks are starting to issue more personal loans. Based on data from the Federal Reserve, revolving debt associated to credit cards has declined in recent times. However, non-revolving credit, such as personal loans, has increased accordingly.

Even though economic analysts have estimated the inflation rate at near zero, many Americans are beginning to realize how some cost of living has increased. Grocery, gas, and other commodities have steadily increased during recent times.

For a majority of individuals, a long-term personal loan is more attractive. Having extra finances on hand will be invaluable during emergencies and unexpected occurrences. Though long-term personal loans are not the only option for many, payday loans can have extremely high interest rates. What loans a person can get also is greatly dependant on their credit score and history.

Union Bank advertises an unsecured personal loan with rates between 9.0% and 19.138%. What rate the borrower actually gets is again dependant on their credit score.

Some banks give priority to their own current customers, so it may be helpful to have an account with that bank.

Changes to Debit Card Fees

Admin — Mon, 10 Jan 2011 00:00:00 GMT

A financial reform bill passed by Congress last summer urged the Federal Reserve to start limiting debit card interchange fees. Interchange fees are charged by the credit card companies to retailers for every instance a customer decides to pay with a credit card.

According to information provided by the Federal Reserve, interchange fees generate an enormous amount of money to the credit card industry. In 2009 alone, interchange fees amounted to $16 billion.

However, those moneymaking days seems to be over for the credit card companies. The Federal Reserve has projected two separate proposals that will limit debit card interchange fees. One places a seven cents cap per transaction while the other limits interchange fees to twelve cents per transaction. One of these changes is expected to go into effect July of 2011.

When the new caps are enacted, analysts predict the new rules will benefit some groups while working against others.

The group most benefited by the changes would be retailers and small businesses. Once the rules are in place, the Federal Reserve estimates that businesses will save 70-90% on debit fee charges. Lower debit card fees will also deeply benefit online businesses as well. However, the ultimate goal for these new regulations is to benefit the consumer. As retailers pass some of the debit card savings to the public, consumers should see lower prices for their goods.

On the contrary, banks may be the group most negatively impacted by the new rules. The banking industry stands to lose billions in lost revenue from debit card fees. Credit card providers also rely heavily on debit card fees for revenue. It is estimated that twenty percent of total revenues for Visa comes from debit card fees. Others affected by the new rulings would be credit unions. Due to their limited size, credit unions will have greater difficulty absorbing the cut back in debt fee revenue.

Secured and Non-Secured Credit Cards

Admin — Mon, 10 Jan 2011 00:00:00 GMT

When comes to renting a car, making online purchases, and reserving a hotel room, credit cards has become an absolute necessity. Consequently, if the cardholder is unable to pay back the debt or over uses the card, this can be detrimental to the individual.

In almost all cases, card issuers will review a borrower's credit score before accepting a credit card application. Those with poor credit scores will often times be rejected. However, there are card issuers out there that specifically tailor to individuals with poor credit.

Of these credit cards, there are typically two options; secured and non-secured credit cards. Secured credit cards typically have lower interest rates while unsecured cards have higher rates because of the increase in risk.

A good example of a non-secured credit card is the First Premier Bank Gold Credit Card. The card requires no security deposits but involves a high interest rate. The card is specifically targeted towards individuals with poor credit.

The First Premier Bank Gold Credit Card has a APR rate of 59%, and annual fee of $75, and a late payments fee of $35.

With the First Premier Card, cardholders can improve their credit score because the card reports payments to the consumer reporting agencies. Cardholders should not that paying your bills on time can improve your credit score while late payments can lower it drastically.

A $45 processing fee will be charged for the card.

Major Corporations Rally Against New Credit Card Rule

Admin — Wed, 05 Jan 2011 00:00:00 GMT

New lending rules proposed by the Federal Reserve Board have cause a bit of controversy among some of the major national corporations.

The Federal Reserve's proposition is based on an amendment that would change how individuals may qualify for a credit card. The change suggests applicants be evaluated based on their individual income as opposed to their household income.

However, according to a report from the Wall Street Journal, a number of major corporations claims that this would hinder millions of Americans from being able to qualify for credit. These corporations included Citigroup, Home Depot, and Dress Barn.

The report cited stay-at-home moms as an example. These individuals have little income of their own and would be alienated if they wanted to apply for a credit card. These companies say that the new restrictions will not allow these people to open as many accounts at checkout.

Due to changing attitudes from the American population, lenders are experiencing difficulty trying to get consumers to apply for new cards in recent months. Consumers prefer other forms of payment in order to stay away from debt.

Consumer Spending Rises

Admin — Wed, 05 Jan 2011 00:00:00 GMT

According to the Commerce Department, consumers went through the largest shopping spree since the recession. Retail sales increased 0.8% in November, which was attributed to a 2.8% rise in department store sales.

The increased sales figures were better than what many analysts had expected. It also impelled many to change 2011 economic predictions. The spurt can be attributed to government tax cuts, long-term unemployment benefits, as well as rising gas prices.

Though many economists anticipated an increase in spending, some are concerned it’s a sign that consumers are backing off efforts to be more financially responsible. The Commerce Department estimated consumer spending increased .5% while income only increased .4% in October.

Consumer craving for credit cards typically moves in the opposing direction of household savings. The volume for online credit card applications jumped thirty-nine percent 2009 to 2010. As predicted, household savings fell accordingly during this period.

The card issuer showing the biggest gains during this period was HSBC. Online applications from the bank grew from zero percent in 2008 to eighteen percent in 2010.

One of the few positive changes of the recession was the American personal saving rates. According to the US Commerce Department, personal saving rates peaked at 7.2% that was significantly higher than the 2.0% during pre-recession levels. Though increased spending during the holiday season is beneficial towards retailers and credit card companies, the celebration may be short-lived as the credit card bills start piling up in January.

Yearly Growth Reported for Credit Card Loans

Admin — Wed, 05 Jan 2011 00:00:00 GMT

According to a Bangko Sentral ng Pilipinas press release, credit card loans increased by 2.9 percent as of September last year. This was a P133.9 billion increased compared to the year before.

In comparison to the second quarter of the year, the third quarter CCRS saw a 1.4 percent drop at the end of June. The calculations include the thrift banks' credit card subsidiaries as well as the larger banks.

Based on information from various bank sources, a shift in credit card payments can be seen. The provided data showed many cash consumers and debit cardholders as being an influential factor in the changing of the market.

According to the report issued by the central bank, large banks made up 83.2 percent of total CCRS. This percent equated to P111.4 billion. Furthermore, P22.3 billion or 16.6 percent were held by credit card subsidiaries. Small thrift banks, which are not in relations with the larger banks, only accounted for 0.2 percent or P3 million.

Moreover, the BSP indicated that the quality of CCRs improved somewhat, with the ratio of non-performing CCRs to total CCRs, inclusive of credit card subsidiaries, at 13.5 percent which was lower from end-June’s 13.7 percent but up from September 2009’s 12.8 percent ratio. BSP concluded that the fall in non-performing CCRs by 2.7 percent to P18.1 billion attributed to the quarterly improvements.

BSP also indicated that non-performing CCRS totaled non-performing loans ratio at thirteen percent from 13.3 percent during the second quarter but was up from 12.3 percent a year before.

The Future of Credit Cards 2011

Admin — Wed, 05 Jan 2011 00:00:00 GMT

The year 2010 was not the best of years for the credit card industry. Most consumers may have had one or two cards taken away from them. Unfortunately, 2011 may not be very bright for credit card providers and consumers as well. Some of the changes in stored include the following.

The Credit Card Accountability Responsibility and Disclosure (CARD) Act of 2009 was fully enacted in 2010. The legislations were designed to protect consumers from the unethical practices of the credit card industry. The CARD Act has essentially eliminated all over-limit fees and restricted the amount of late fees, which can be charged to cardholders. Such changes are expected to cost the credit card industry fifty billion dollars a year. Credit card companies will most likely look to offset these loses by imposing new fees to the consumers.

Based on the new rules imposed by the CARD Act, banks cannot charge cardholders overdraft protection fees unless consumers actively opted into entering the program. Moreover, interchange fees on debit card transactions is about to be capped as well. Just these two changes alone will cause an estimated eighty billion dollars in lose annually for the banks. Again, banks will most likely make up for these loses by implementing new fees applied to credit card accounts and an increase in ATM fees.

Cardholders can also expect an increase in credit card interest rates for 2011. Currently, the average interest rate on a credit card account is 14.7%. This figure is already high and is the easiest way for banks to increase revenue.

Fortunately, it should not be all bad for credit card users in 2011. Credit card issuers are less stringent in their lending practices, so those with lower FICO scores can expect more credit card offers in the mail and an easier time applying for one.

Who Really Benefits From Rewards Cards

Admin — Wed, 05 Jan 2011 00:00:00 GMT

During the last few months, credit card providers having been soliciting rewards cards as a way to earn back some of the cash spent during the holiday season. These rewards credit card offers were sent to millions of consumers, which promise ways to save up for vacations and gifts.

However, according to a recent study conducted by the Federal Reserve Bank of Chicago, rewards cards may not be as beneficial as some might want consumers to believe. Based on the study, rewards programs encourage people to increase their debt significantly. Consequently, rewards cardholders typically spend more on interest payments than what they receive in return through the programs.

According to the Federal Reserve Bank of Chicago, a one percent rewards programs earns the cardholder twenty-five dollars on the average. The same group of people also spends an average of seventy-six dollars more per month and increases their debt amount by $197. This essentially means that rewards card members generally pay more than what they get in return through the reward programs.

The study suggests, "The impact of a relatively small reward generates large spending and debt accumulation."

Not all the data from the study reflects negatively on rewards programs. Though many consumers spend more with their rewards cards, a majority offsets their spending by reducing transactions with their other cards. Many cardholders also adamantly pay off their balances in full every month, avoiding expensive interest payments.

According to a study conducted by Experian, the group benefited most by cash-back rewards cards are banks. The study found, "Rewards are an effective tool to steal customers from a financial institution’s competitors.” The program also encourages more frequent use of their credit cards. “The relatively small average cardholder redemption of $25 per cardholder makes such a program a cost effective tool to increase bank revenue from increased spending and borrowing by cardholders,” according to the study.

Federal Reserve Proposes Cap on Debit Card Fees

Admin — Wed, 05 Jan 2011 00:00:00 GMT

With new Federal Reserve rulings, it may become less costly to use credit cards in stores. The Federal Reserve aims to limit interchange fees on debit cards. Interchange fees are fees paid by retailers to credit card networks every time there is a card transaction.

One suggestion is the limit swipe fees for being no more than twelve cents per transaction. Although this may definitely benefit retailers, the change might not necessarily benefit consumers.

With every credit card transactions, business owners such as Sandra Harrison of Gamble's Gift II, has to pay a fee.

"Whatever your bill is, the merchant is going to pay a percentage," she said.

Debit cards typically carry a swipe fee of one percent of the total purchase amount. Though it may not seem like a lot, Harrison says the amounts add up during the busy holiday season. For many businesses, these fees make it difficult for them to offer competitive prices and superior service.

Harrison added, "It doesn't seem fair but it's all part of the system."

Since the popularity of cash and checks has greatly declined, this typically means more fees imposed on retailers.

She said, "Every retailer struggles to pay fees."

For this reason, Harrison approves the twelve-cent cap on transactions. Overall, this means as much as a ninety percent drop.

Certain critics fear banks would make up for the lost revenue by imposing fees to cardholders.

Harrison said, "A consumer is not going to like that."

Others believe that card providers may remove the popular reward programs as another way to make up for lost profits.

Atlanta Bargain Hunter Credit Cards' For the Holidays

Admin — Wed, 05 Jan 2011 00:00:00 GMT

It is now common knowledge that it is wise to avoid using credit cards to stay out of debt. Even though this thought has its merits, there are still circumstances where it is beneficial to use credit cards. Those who are able to pay off their credit card bills in full every month may find it beneficial to use credit card this holiday season. Most credit cards have rewards and incentives that will serve consumers well.

Credit cards usually have product protection programs that are not available with any other form of payment type. With card transaction, they will typically let you return items the manufacturer will not and include travel insurance of up to two thousand dollars. John McCosh of CredAbility, a nonprofit credit counseling service based in Atlanta said, "More and more people are shopping online these days with credit cards. And a credit card protects you if the delivery is wrong."

Credit cards also have card protection if you card is stolen or lost. In these circumstances, fraudulent charges that occur during this time are usually covered by the issuer.

Products bought with credit cards usually carry an extended warranty as well. Most credit card providers will automatically extend the manufacturer's warranties by up to a year.

Besides protection and extended warranty programs, some credit cards also offer reward programs. These programs allow cardholders to earn points for every purchase that can be redeemed for cash, gifts, or even vacations.

How Credit Card Debt Relief Can Help

Admin — Wed, 05 Jan 2011 00:00:00 GMT

Federal government credit card debt relief programs are aimed to assist those who are struggling with credit card debt during financial disorder.

Gloomy economic settings have left many Americans jobless, in heavy debt, with very little unemployment benefits, in foreclosures, and dealing with many other financial matters. All this chaos that is just in time for the holiday season. For many, the most stressful issues are related to credit card debt and all the unpleasantries that come with it. With so many Americans finding themselves in similar situations, the government decided to step in with a measure of relief with the federal government credit card debt relief.

Federal debt relief programs help those in financial mayhem make settlements on their credit card debt. These settlements can occasionally save debt holders half or more of the amount owed to creditors. Lenders also benefit from these programs by receiving concessions like tax rebates and other benefits authorized by the federal government.

Recent enacted legislations also forbid upfront fees for debt settlement services. This will be infinitely helpful to those who are in desperate need of these services but do not have the extra finances to pay for them. In general, the programs offered by the federal government and the FTC helped countless debt holders in relieving some of their financial strain. Though a lot remains to be done, these programs have started consumers on the right foot in being debt free.

Credit Card Interchange Fees; What Are They?

Admin — Wed, 05 Jan 2011 00:00:00 GMT

What are interchange fees and why is it such a debated topic?

To better understand interchange fees, one must do away with the common misunderstandings. Contrary to common belief, MasterCard and Visa do not actually issue credit cards. These two companies manage the networks responsible for processing the credit card transactions. Assuming credit cards are cell phones, than Visa and MasterCard are the phone lines and networks to which the calls are made.

Running these networks requires a cost that is collected in a complicated manner.

With every credit card transaction instance, the retailer pays a fee to the credit union or bank that issued the card. This fee is usually one to two percent of the transaction amount.

Though Visa and MasterCard do not get a direct portion of the fee, they do get revenue through specific arrangements with the 16,000 banks and credit unions that distribute the cards.

Where the controversy begins is the justifications of these interchange fees. Visa, MasterCard, and American Express suggests the fees are justifiable because the convenience of credit cards help drive up sales. On the contrary, retailers debate that the fees are too high and should allow consumers to choose lower cost alternatives.

When to Use a Credit Card

Admin — Wed, 05 Jan 2011 00:00:00 GMT

With a majority of Brits striving to pay off credit card debt, many are looking into different forms of payment. Though this may seem to be the smart thing to do, there are still several compelling reasons to use credit cards. Taocredit.com will discuss five of these scenarios where credit cards may be a better payment option.

Renting a car is one of the better reasons for using a credit card. Most rental companies will require a credit card to book a car. However, using a credit card to rent a car will have its own advantages. Based on section 75 of the Consumer Credit Act, car rentals over £100 will place equal liability to the credit card provider if something were to go wrong with the arrangements. This would be especially beneficial when dealing with companies overseas.

Hotel reservations are also another excellent opportunity to use credit cards. Credit cards are typically required to confirm a reservation. Similar to car rentals, using a credit card to book a hotel will offer you the same benefits and protection provided by section 75 of the consumer credit act.

Using a credit card for company expenses may also have its advantages. With many companies expecting their employees to pay for out of office expenses, credit cards make it easy for business owners to reimburse these expenses as well as keep a tab on their spending.

There are also sporting events where tickets require payment from certain credit card providers. For example, the London 2012 Olympics tickets must be paid for using a VISA card. Those who wish to view this once in a lifetime event will have to apply for a VISA card if they do not already have one.

Credit cards also allow individuals to build up their credit rating, receive rewards, and protect their purchases. Using your credit cards and paying them on time can increase your credit score. Certain reward-based credit cards can allow cardholders to earn cash or rewards by simply using the card. Again, under section 75 of the consumer credit act, purchases of £100 will be protected.

American Express Shares Fall After Suggested Federal Regulations

Admin — Wed, 05 Jan 2011 00:00:00 GMT

American Express Co. shares dropped 3.5 percent after Stifel NIcolaus & Co. suggested that federal regulations on debit card fees might extend for credit cards as well. This was the largest drop in more than two months.

The Federal Reserve proposed legislations that would limit the interchange fees that merchants must pay to accept debit cards. Such actions will give retailers more reason stay away from American Express credit and charge cards due to their higher cost.

Stifel analyst, Chris Brendler said, "We are increasingly convinced that credit interchange will inevitably be the next target,” he wrote. “The now- significant disparities in payments’ costs greatly increase the risk," he wrote.

President Barack Obama signed the Dodd-Frank regulatory-overhaul legislation in July, which prompted the Federal Reserve proposals. The Federal Reserve was asked to regulate interchange fees so that the cost of processing debit transactions is reasonable and proportional. Average interchange fees in the United States is currently about two percent per transaction.

The credit card payment processing industry has been able to side step U.S. legislations to regulate credit card fees. They claim that these fees are necessary to compensate banks for the risk of lending money. This is an argument that holds very little water when dealing with debit cards, which immediately deduct finances held in consumer checking accounts.

Shares of the world's largest payments network, Visa Inc., fell 17 percent last week. MasterCard Inc., which holds the number two title, fell 13 percent when the Federal reserve proposed rules to limit interchange fees to 12 cents per transaction.

American Express charges merchants an average 2.56 percent per purchase. They do not offer debit cards. American Express is also combating a federal antitrust lawsuit that suggests the company's contracts unfairly disallow retailers from persuading customers to cheaper card brands.

Credit Card Offers on the Rise

Admin — Wed, 05 Jan 2011 00:00:00 GMT

An associate English professor at Ball State University in Muncie, Indiana, Jackie Grutsch McKinney claims her son got his first credit card offer recently. The irony is that her son is only five years old. Jackie receives four to five credit offers daily and attributes the increase to an improving economy. McKinney said, "We already have a couple of cards, and we're not looking for more.''

Synovate Mail Monitor, which tracks credit card solicitations, estimates a sixty-two percent increase in credit card solicitations from 2009. Approximately 2.25 billion credit card solicitations are expected to be received by consumers by the end of this year.

Chief executive of Discover Financial Services, David Nelms said, "Marketing at the company had returned to pre-crisis levels and we expect to maintain those more normal levels of marketing in the future."

Curtis Arnold, founder of CardRatings.com suggested that the credit card market was less attractive early 2010. He said, "But as the year progressed and credit card offers began reappearing in consumer mailboxes, so have attractive new reward programs."

Arnold said that credit card issuers are already increasing the level of cash back products. Cash back cards are expected to return to levels prior to the recession. He said, "In some cases, we'll see the movement happen pretty rapidly."

Arnold also suggested that credit card providers would also increase focus and product offerings to consumers with high credit scores. "We've seen a few really aggressive sign-up bonus offers in the past couple of months," Arnold said. "So, bonus offers will likely become quite alluring in 2011."

Retailers Pay for Credit, Debit Card Transactions

Admin — Wed, 05 Jan 2011 00:00:00 GMT

Those shopping at L. Oppleman Pawn will get a slight discount by not using plastic as payment. This is because every credit or debit card transaction actually costs the store money. Every merchant typically has to pay a processing fee to the banks that issued the credit card. David Somers, owner of L. Oppleman, quickly learned that he is basically paying for the rewards points his customers earn on credit card purchases. He said, "I didn’t realize how much money you’re giving away for processing."

The Federal Reserve is currently working on limiting these fees that retailers pay to process debit card transactions. The debated rules would limit interchange fees at twelve cents per sale. These rules have no impact on credit card transactions or the actual payment processing companies.

According to Federal research, the average interchange fee was 44 cents last year, or 1.14 percent per transaction. President Obama approved a financial reform bill in July, which ordered the Federal Reserve to come up with regulations to limit debit card fees.

Some retailers, like Somers, believe that debit card fees raises prices on larger stores with more transactions. “The margins are getting awful thin for retail merchants these days,” he said.

On the contrary, banks stand to lose a great deal of revenue under the Federal Reserve's proposed changes. Brandon Farmer, vice president of operations for Bank of the James in Lynchburg, said, "I don’t know a banker that’s happy about this whatsoever, it’s a good revenue stream that we’re going to lose.”

Farmer believes the new rules do not actually address what retailers pay to processing companies, and will not save money for consumers and merchants. “Processing fees may not go down, depending on who’s doing the processing,” he said.

Merchants Rally Against MasterCard, Visa

Admin — Wed, 05 Jan 2011 00:00:00 GMT

Near the end of 2009, over 575 million credit cards were in circulation with transactions totaling more than $1.5 trillion. This benefitted retailers in the United States greatly. Yet these same merchants are leading a campaign against card issuers for collecting large swipe fees for the use of their cards.

Recent rules proposed by the Federal Reserve were aimed to cut debit card transaction fees. Based on the new rules, retailers would only have to pay twelve cents per debit card transaction versus the previous forty-seven cents. When the new rates go into effect, an estimated thirteen billion dollars in lost debit card revenue would hit the large banks.

Having accomplished this big win with debit cards, retailers are now focusing their efforts on credit card swipe fees, which generate an estimated fifty billion dollars a year for card issuers. The largest component of swipe fees is the interchange fees.

A Minneapolis law firm Robins, Kaplan, Miller & Ciresi is leading the lawsuits against Visa, MasterCard, and the nation's largest banks over the setting of fees. A partner at the firm, Craig Wildfang said, "There is no free market in the setting of interchange fees because all the banks charge the same amount, and Visa and MasterCard charge basically the same amount."

Typical credit card interchange fees range from two to five percent of the transaction. How much is charged is dependent on the type of transaction, the merchant and the type of card. Rewards cards typically carry the highest fees for merchants.

MasterCard and Visa continues to defend their swipe fees as essential in sustaining a payment network, reducing credit risk and preventing fraud. They also suggest that retailers are downplaying the benefits of belonging to a card network, such as being paid quickly and not having to worry about bounced checks. Visa commented, "Retailers want to continue to benefit from the payment network in which they participate without paying their fair share."

Safer Yet More Complex Credit Card Transactions

Admin — Wed, 05 Jan 2011 00:00:00 GMT

The Reserve Bank of India (RBI) is establishing guidelines to improve security to phone banking users in India. These changes involve an additional password that would be required by the banks while a cardholder makes any transaction. This additional step in security will be implemented immediately after the New Year. RBI will mandate all banks reject any banking transactions done over the telephone without a One-Time password (OTP). These rules apply to Interactive Voice Response (IVR) services as well.

The One-Time password would remain active for a period of two hours and is valid only for a single use. A separate OTP would be required for any IVR transactions. The extra steps enacted would strengthen protection against the increasing instances of credit card theft. It would render all stolen or lost credit cards unusable to thieves. The banks for the Internet banking transactions are following a similar strategy.

At the beginning of 2010, the banks were mandated to provide their customers with an additional security layer for all the credit card transactions made over the internet. Banks were in the process of issuing OTP for their phone banking transactions while Citibank and HDFC have already made the required changes.

Once the new security system is initiated, cardholders would require a minimum of five numbers to conduce a credit card transaction over the phone. These include information such as the 16-digit card number, card expiration date, CVV number, mobile number, and finally the new OTP.

Visa Signature Credit Cards Discounts at Amazon.com

Admin — Mon, 27 Dec 2010 00:00:00 GMT

Visa Signature credit card members can take advantage of amazing discounts this holiday season. Visa and Amazon.com have extended their discount incentives for this year’s most popular holiday gifts.

Current members will find it extremely easy to participate. They simply can visit the promotional page and see what items are available with the promotion. Cardholders can visit the holiday page between the times of 9 AM and 9 PM PST to have a chance to purchase any of the daily special Amazon products. These promotionally priced items are limited in quantity and often sell out very fast. Those looking to take advantage of these special prices should visit the page early in the morning.

There are very little rules or terms related to the discounted purchase. To take advantage of these prices, the cardholder must simply purchase the item during the promotional period.

Amazon and Chase had partnered during the beginning of the year to offer Amazon branded Visa Credit Cards. Those who qualified for the card earned an instant thirty dollars in Amazon.com gift certificates. These cards also offered three reward points to every dollar spent at Amazon.com.

Credit Cards May be Better for Online Purchases

Admin — Mon, 27 Dec 2010 00:00:00 GMT

With the holiday shopping season nearing, many consumers will be on the lookout for special holiday deals and benefits from their favorite online retailers.

Before making a purchase, consumers should carefully compare the advantages of using a credit card as the method of payment.

As credit card companies team-up with retailers to offer consumers added savings when a specific card is used, using a credit card can be extremely rewarding. Using a credit card also secures a purchase with return and payment protection plans.

Though credit cards offer many advantages, recent reports show consumers prefer different types of online payment methods. Online shoppers are looking to PayPal and WalletPop type services to have funds deducted directly from their bank accounts. By doing so, individuals believed they can better manage their finances and stick to their holiday budgets. This is because these purchasing methods allow consumers to link their spending directly to an account or debit card.

Another online service called eBillme also allows consumers to use cash for payments. This particular online service is similar to some online utility and mortgage loan payments by offering account holders to pay directly from their bank accounts. Certain merchants even offer discounts for using this service as a payment method.

By using a variety of payment methods, consumers can better manage their finances and avoid debt this holiday season.

Using Credit Cards can be Safer Compared to Debit Cards

Admin — Mon, 27 Dec 2010 00:00:00 GMT

It is expected that more consumers are planning to use cash and debit cards this holiday shopping season as a budget friendly alternative to using credit cards.

During recent years, debit card usage has particularly seen a notable increase. This trend will most likely strengthen as more and more people try to avoid debt.

In fact, debit cards transactions surpassed credit cards in 2009. An astonishing eighty percent of consumers have debit cards which outnumbers the number of credit card users by two percent. Recent polls also indicate that seventy percent of consumers are planning to use their debit cards this holiday season.

Though both cards may have their advantages, consumers may wish to compare them for purchases as using a credit card can offer extensive consumer protection.

Both debit cards and credit cards may offer zero liability coverage when a consumer’s card is compromised, but not all debit transactions may be covered by the policies. With debit cards, certain claims can be waived if the cardholder files too late or behaved irresponsibly. Sharing PIN numbers or other personal information can be reason enough not to honor your coverage.

Even for those debit card users whom qualify for coverage, many would have to generally wait longer for their funds to be reimbursed. The longer wait and tied up funds can lead to missing or late payments for the card holder.

In comparison, credit card holders generally are able to access more funds during a claim. Credit cards fall under the Fair Credit Billing Act which limits user liabilities. Experts also agree that credit cards offer its consumers more online security.

All these reasons should persuade consumers to carefully compare the advantages and disadvantages of both types of cards before using them on a purchase. Credit cards generally offer protection policies and reward incentives that may be useful to some individuals.

The Benefits of Comparing Credit Cards

Admin — Mon, 27 Dec 2010 00:00:00 GMT

In the third quarter, Americans continue to decrease the occurrence of late payments to their creditors. Although late payments are generally lower, some states seem to show more financial responsibility compared to others.

A report released Monday by TransUnion pointed out states which showed poor credit management. TransUnion is a credit and information management company.

Residents of Nevada, Florida, and Mississippi shoed the highest delinquency rates in the country. Nevada showed a rate of 1.28 percent, 19 percentage points about Florida and 22 percentage points greater than Mississippi. Mississippi and the District of Columbia were the only two states in the country that showed an increase in delinquency rates.

On the Contrary, Alaska and Nebraska declared the highest decrease in consumer delinquencies. Regardless of the huge decrease, Alaska residents still has the largest average credit card debt at $7,159 per person.

TransUnion vice president Ezra Becker commented, “On the delinquency side, the news remains good as consumers continue to show fiscal responsibility in paying down their credit card obligations."

The credit and information management company predicts Nevada to have the highest delinquency rate at the end of the year.

Credit Card Debt Decreases Along with Average Credit Scores

Admin — Mon, 27 Dec 2010 00:00:00 GMT

Throughout the country, consumers have been paying down their credit card debts in 2010. Credit card debt has decreased seven percent nationwide and nine percent in California. However, even with these numbers, credit scores continue to decline.

According to a TaoCredit.com, which tracks such statistics, lowered credit scores can be attributed to high unemployment rates, lack of available credit, and a continuingly weak housing market.

According to their studies, credit scores fell one point nationally between October and November to 665. This is down four points from January. The state with the highest credit score goes to Massachusetts with an average of 684 points. On the contrary, Arkansas and Alabama had the lowest average at 641 points.

According to the report, the average American consumer with a credit card had, in November: $7,336 in credit card debt, $173,566 in mortgage debt, $49,908 in home equity, $15,147 in car loans, and $28,617 in student loans.

The state with the largest drop in credit card debt is Wisconsin. Since January, their debt rate decreased an average thirty-one percent.

Canada's Competition Bureau Targets Visa and MasterCard

Admin — Mon, 27 Dec 2010 00:00:00 GMT

Ottawa’s Competition Bureau launched a lawsuit against Visa Canada Corp. and MasterCard International Inc. for allegedly imposing restrictive rules on credit cards that cost retailers about five billion dollars a year in fees. Much of this money is passed on to consumers and is imposed regardless of the payment method they choose when making the purchase. These fees often show up in the form of higher prices on their merchandise.

Both Visa and MasterCard control more than ninety percent of the credit card market in Canada. They basically dictate the fees retailers must pay in order to accept credit cards as payments. These fees typically range from 1.5% to 3% of transactions which are nearly twice as high as the charges inflicted on retailers in Australia, New Zealand, and Europe.

The Competition Bureau began its investigation on the two companies in 2009. The study concluded that both MasterCard’s and Visa’s rules are hindering merchant choices and limiting competition between the two credit card giants. Competition Commissioner Melanie Aitken said, “Visa and MasterCard's anti-competitive behavior hurts businesses and consumers alike.”

The bureaus recent actions show it’s increasingly aggressive stance against anti-competitive activities. Ms. Aitken became commissioner the previous year and has already confronted debatable practices in the real estate and wireless industries. The bureau recently forced Canadian Real Estate Association to allow more competition from businesses that offer lower cost services.

The Competition Bureau suggests the best way to promote competition with respect to fees is to allow retailers to charge consumers extra for using higher cost cards. Some consumers may prefer these cards because of its more attractive rewards programs.

MasterCard and Visa are predictably displeased with the legal actions. They argue that it will only benefit retailers in increasing their profits and will do very little for the consumers.

“Visa is disappointed that the Canadian Competition Bureau has taken an anti-consumer position by filing a lawsuit against Visa to overturn policies that protect consumers from being punished by large retailers who seek to impose surcharges and take away consumer choice at the checkout counter,” the company said in a statement.

Sharing Your Credit Card's Security Code

Admin — Mon, 27 Dec 2010 00:00:00 GMT

It can often be uneasy providing someone with a credit card security code over the phone. These are the additional set of three to four digit numbers located on the credit card which is often required to complete a transaction. These digits are used to verify credit card information when the card itself is not present. Basically these numbers are just another layer of protection from online credit card fraud.

If both the credit card number and security code is stolen, thieves will still not be able to make any transactions at a store. The physical card is still required for any in-person transactions. However, online transactions are a different story. With both the security code and credit card number, thieves can basically make any purchase online. Dr. Jerald Dawkins of True Digital Security, Inc. commented, “The use of CVC over the web or phone is really at your discretion and the trust you have in the organization that they will protect the data correctly.”

President of Ideal Cost, Robert Livingstone offers some practical advice regarding credit card security codes. Those concerned about giving out their credit card information can opt to pay for a purchase when they pick up the item where it is allowed. Livingstone also suggests using credit cards as opposed to debit cards if an individual is concerned about security. Fraudulent charges are often easier to dispute with credit cards compared to a debit card.

Security codes can give individuals a false sense of security. The best security feature resides with the common sense of the cardholder. Although many security experts believe that there is very little risk in providing your credit card information to reputable companies, they all agree that it is wise to be cautious.

Changes to Gift Card Policies Benefits Consumers

Admin — Mon, 27 Dec 2010 00:00:00 GMT

Recent statistics predict that $87 billion in gift cards will be exchanged worldwide this year. Recent United States legislations were enacted to protect consumers for hidden fees and conditions often found with gift cards.

The Credit Card Act of 2009 makes gift cards more consumer friendly. This was accomplished by eliminating those hidden fees for the initial year you have the card. No longer can stores charge you activation fees and monthly fees that you were not even aware of. The Credit Card Act also extends the expiration date on gift cards to being no less than five years from the date of purchase. Though the card itself can still expire, its monetary value will not. Gift card holders can simply contact their merchant for a replacement card once it has reached its printed expiration date.

It is important for consumers to understand that fees can still be imposed on gift cards after the first year. The rules only limits these fees for the first year, but after that, the fees can be excessive. The new rules also mandate that financial terms and conditions be clearly disclosed on the gift card packaging. Understandably, gift card issuers can charge you fees and set expiration dates as long as it is clearly indicated on the packaging. It is important for consumers to carefully review these terms before purchasing. The new laws do not apply to prepaid debit cards and rebate cards.

The Pluses and Minuses of Unsecured Credit Cards

Admin — Mon, 27 Dec 2010 00:00:00 GMT

A person’s credit score can often seem like a double edge sword. It is common knowledge that being financially responsible and paying your bills on time can often get you a high score. By being aware and scrupulous of their bills, loans, and credit cards, individuals can earn themselves an admirable credit score. A good score, in turn, will grant them the privilege of getting good interest rates on auto loans or a mortgage. But the very benefits a good credit score can get consumers can also hurt their numbers as well. Frequent inquiries to your score when you apply for a new loan or more credit can result in point deductions from your credit score.

Consumers are using their own methods to manipulate their scores in their favor. By creating their own secured loans, they can quickly increase their credit scores. By making a large transaction on your credit card, a credit score can initially drop about six points. However, if that same purchase is paid off in full within a month’s time, your score can increase as much as twenty points. A transaction is considered large when it is over eighty percent of your credit limit.

Though we are often taught that credit card debt is bad, there is undeniably certain form of credit card debt that is essential for some individuals to have. Some debt is crucial for individuals to maintain an adequate amount of financial buying power.

Credit Cards and Alternative Payment Options

Admin — Mon, 27 Dec 2010 00:00:00 GMT

Recent studies have shown a decreased dependence in credit card usage. Consumers are taking the initiative to reduce late payments to lenders and to use cash, debit cards, and checks more frequently this holiday shopping season. The trend was ratified by the Federal Reserve Board’s 2010 Payments Study.

The particular Federal Reserve study is conducted once every three years. Its goal is to ascertain the dollar value and structure of consumers’ noncash payments. The Federal Reserve Board research concluded an overall increase in volume of electronic payment methods with the exception of credit cards. The analysis was taken between the years 2006 to 2009.

According to the report, over seventy-five percent of American noncash payments are made online in 2009. This is an astounding 9.3 percent increase over the previous study. Since 2006, the number of noncash payments has also increased by 4.6 percent.

The average American consumer can also be seen reducing their spending due to the recession. The average value of transactions fell 1.6 percent each year. This is in contrast to the 3.9 percent annual growth rate from 2003 to 2006.

Executive vice president of the Federal Reserve Bank of Atlanta, Richard Oliver commented, “The results of the study clearly underscore this nation's efforts to move toward a more efficient electronic clearing system for all types of retail payments. It is also likely that the results reflect changing consumer behavior during difficult economic times."

Debit card transactions showed the largest growth during the time period. Usage increased by more than 12.8 billion payments which is a 14.8 percent growth for the year. On the contrary, credit card payments decreased by 100 million transactions for the year.

Though debit cards are increasing in popularity, there are still known advantages of using credit cards. Such features as purchase and return protections can potentially save consumers money when errors occur. For this reason, many consumers may compare the benefits of each type of payment before using it the fund this year’s holiday shopping spree.

Increase in Credit Card Debt

Admin — Mon, 20 Dec 2010 00:00:00 GMT

According to a new study by online credit card comparison guide CardHub, credit card debt continues to increase.

Based on information from the Federal Reserve, consumer credit card debt had risen by $6.5 billion in the third quarter of 2010. This data disagrees with other studies that indicate a drop in credit card debt.

The inconsistency may be due to the fact that most credit card debt studies do not factor in charge-off figures for the accounts. Charge-offs occurs when lenders categorize the debt amount as uncollectable, according to Cardhub's CEO and founder Odysseas Papadimitriou. Credit card providers and banks typically write off loans that have been delinquent by more than 180 days. Even though they can still legally try to collect the defaulted funds, it must be taken off the books by law.

Papadimitriou commented, "It is the credit equivalent of having your house foreclosed on. The debt is no longer considered outstanding."

Although the Federal Reserve showed outstanding credit debt had decreased by $10.3 billion this quarter, they also reported $16.8 billion in charge offs. Essentially, while debt has decreased thirty-nine percent compared to the previous year, it still higher than what it was last year. Even so, Papadimitriou believes we are on track for economic recovery. He added, "Consumers need to understand that they will not be able to revert back to the spending levels they adopted pre-recession. Instead, they need to continue to maintain a standard of living that is justified by their salaries.”

Recent Federal Reserve statistics also showed an increase in consumer borrowing. According to them, borrowing increased by $3.4 billion compared to a year before. This is the largest increase since July 2008.

Credit Card for Consumers with Poor Credit

Admin — Mon, 20 Dec 2010 00:00:00 GMT

It is common knowledge that bad credit can make it extremely difficult to obtain a credit card. For those with a less than perfect credit history there is a solution. There are cards available that are specifically tailored for individuals with bad, poor, or no credit.

A good example would be the Orchard Bank Visa Card.

The Orchard Bank Visa Card reports all transactions to the three credit reporting bureaus. If the cardholder continues to make payments promptly, they will see their credit score improve with the Orchard card. Most pre-paid and debit cards will not report transactions to the credit bureaus.

The card is also accepted at millions of locations worldwide. It may be used for online purchases, hotel rooms, and car rentals.

Customers of the Orchard Bank Visa Card can also track their accounts and purchases online. The card carries a 7.90 to 19.90% interest rate that depends on the applicant's credit worthiness. A possible fee of sixty dollars may be charged the first year. After the initial year, an annual fee of thirty-five to seventy-nine dollars can be charged based on the applicant's credit rating.

Government Regulations Improves Gift Cards for Consumers

Admin — Mon, 20 Dec 2010 00:00:00 GMT

In a recent survey conducted by BIGresearch, it is expected that gift cards would be the most requested holiday gift this year. This is based on the National Retail Federation's 2010 Holiday Consumer Intentions and Actions Survey. Due to recent government regulations and legislations, gift cards are now more consumer friendly. The Credit Card Accountability, Responsibility and Disclosure Act impose more restrictions on unexpected or hidden fees and affects gift cards, reloadable pre-paid cards, and gift certificates. Some of the major changes are as follows:

Currently, gift cards will have a minimum of five years before they expire. Many are not aware that gift cards can actually expire, so it is advisable to keep track of expiration dates and contact associated stores if the cards need to be replaced.

Due to the CARD Act, gift cards must now include more disclosures. Fees and limitations must be clearly listed on gift card packaging and include information on fee amounts and how they are charged.

The new regulations also limit inactivity fees to gift cards. Inactivity charges can only be inflicted after a year of non-use. After the initial charge, additional inactivity fees can be charged per month. Detailed information in regards to inactivity fees must be clearly listed on the gift cards.

Those planning to purchase gift cards should also be wary of con artists. The numbers on the back of the gift cards can be copied and used online. Some store employees steal activated cards and give customers blank ones. There are also instances where consumers were sold fake or stolen gift cards which holds no value.

When buying gift cards, make sure they have not been tampered with. To be certain the cards are legitimate, have the store employees scan the cards to make sure they have the correct value amount. It is always a good idea to keep the original receipts for the gift cards as well as encourage recipients to use the cards as soon as possible. If the service is available, recipients of gift cards should always register the cards online through the store's website. Doing so will also allow cardholders to check balances and get replacement cards if lost or stolen. Finally, the best gift cards to purchase are those directly from reputable stores.

WikiLeaks Supporters Hack Visa And MasterCard

Admin — Mon, 20 Dec 2010 00:00:00 GMT

Due to their part in the continuing WikiLeaks controversy, a sizeable and infamous group of computer hackers recently attacked the two largest processors of debit and credit card payments in the world. The international group of expert hackers responsible for targeting Visa and Mastercard are called Operation Payback.

According to the Christina Science Monitor, Operation Payback began when the two payment processor companies refused to process donations made to WikiLeaks after its founder was arrested. The group consisted of several thousand members and is believed to be an element of a more prominent online organization known as Anonymous. Operation Payback primarily targeted the credit networks' websites.

MasterCard's corporate website was offline for several hours earlier in the week while Visa experienced similar attacks. The method used is called the denial of service attacks, which involves querying a web server many times a second in order to disable it.

It was also feared that some hackers might have been able to log on to the companies' databases and had admission to important consumer credit card information. This will allow them access to personal and credit card data for millions of cardholders.

Federal Reserve Reports Decrease in Credit Card Use

Admin — Mon, 20 Dec 2010 00:00:00 GMT

According to a Federal Reserve study issued Wednesday, credit cards are the only electronic payment instrument, which registered a decline in use from 2006 to 2009. The study primarily focused on trends in non-cash payments. During 2009, accumulated credit card payments were valued at $1.9 trillion, or 21.6 billion transactions. This is a drop from the 21.7 billion payments recorded in the year of 2006. On the other hand, debit card transactions increased from 25 billion in 2006 to an astonishing 37.9 billion in 2009. Total value of debit card transactions in 2009 are estimated at $1.5 trillion. Automated clearinghouse payments also increased to 19.1 billion from 14.6 billion and are currently valued at $37.2 trillion. Prepaid card transactions increased from 6 billion ($0.1 trillion) from 3.3billion. The same study showed the use of checks to be growingly unpopular. Transactions associated to checks decreased from 30.6 billion in 2006 to 24.4 billion ($31.6 trillion) in 2009. The Federal Reserve study also showed a drastic increase in electronic noncash payments during the same time period. In 2006, two-thirds of noncash payments were made electronically, while in 2009, nearly seventy-five percent of transactions were electronic. The total number of noncash payments rose to 108.9 billion in 2009 from 95.2 billion in 2006. "The results of the study clearly underscore this nation's efforts to move toward a more efficient electronic clearing system for all types of retail payments," said Richard Oliver, executive vice president of the Federal Reserve Bank of Atlanta, in a statement.

Debt Relief and Consolidation Programs Grow in Popularity

Admin — Mon, 20 Dec 2010 00:00:00 GMT

Due to the current economic situation, credit card debt relief and debt consolidation programs are increasing in popularity as a larger number of Americans look for assistance from these programs. These programs give consumers the chance to relinquish their debt effectively without the use of loans or requiring home equity.

We are still feeling the Wall Street crash on September 2008. The day triggered and economic slump that is still with us today. The domestic unemployment rate increased to 9.8 percent the previous month, which is the highest in the last seven months. A jobs report issued in November shows the United States economy that is fairly flat.

Given the current circumstances, Americans are seeking the benefits of these debt relief and consolidation programs. Many organizations can offer ways to negotiate debt, loans and to consolidate debt as well as help individuals declare bankruptcy. Those looking for assistance from these firms to carefully research their options and decide which one best fit their interests and improve their financial situation.

Debit negotiation is also increasing in popularity. Besides providing relief to credit card debt, these programs can often help with unsecured debt such as medical bills and store branded credit cards. Providers of these programs negotiate on behalf of the debt holder with the creditors in order to reach an agreed upon settlement of accounts for a lower amount. The amount reduced can be noteworthy.

The New York Times wrote, “As they confront unprecedented numbers of troubled customers, credit card companies are increasingly doing something they have historically scorned: settling delinquent accounts for substantially less than the amount owed." Debt relief programs the help negotiate lower debt amounts is a realistic and ethical way of handling debt which can be beneficial to both parties.

The Value of Secured Credit Card Debt

Admin — Mon, 20 Dec 2010 00:00:00 GMT

Many of us can agree that credit card debt is undesirable and any debt is bad debt. Though this is generally correct, there is a form of debt that is vital for certain individuals. This type of debt offers these people financial buying power and is called secured credit card debt.

Secured credit card debt can help individuals rebuild their credit score. People may have low credit ratings due to foreclosures, bankruptcy, too many financial obligations, job loss, repossession, or simply neglect.

Secured credit cards provide these individuals with a tool to rebuild their credit scores. To obtain a secured credit card, one is required to make a deposit into a bank account with the associated card provider. This deposit will in turn become collateral for the credit line on the secured card. In most instances, the credit limit for the card is the same as the amount deposited. Those wanting two hundred dollars in credit will need to make a two hundred dollar deposit. Secured credit cards are usually offered to those with bad or no credit. After using these cards for a year and paying of your monthly balances promptly, most people will eventually be offered traditional unsecured credit cards.

Those thinking of applying for a secured card should avoid those with high fees. Having to deal with these high fees will only weaken your chances of repairing your credit score.

Rebuilding Your Credit with Credit Cards

Admin — Mon, 20 Dec 2010 00:00:00 GMT

More and more American consumers find themselves with low credit ratings. Based on a recent FICO study, approximately a quarter of consumers have a credit score below six hundred points. A credit score below six hundred points is considered a low score. Those that find themselves in this category will have great difficulty in obtaining a mortgage, person loan, or auto loan. Even if lenders approve a lone to individuals with poor credit, interest rates are very likely to be extremely high. On the bright side, credit scores can be improved or repaired. Much of this can be done simply by using credit cards.

Financial experts believe the primary reason people find themselves with a poor credit score is because the misuse of credit cards. With too much credit debt, your credit score can be deeply impacted in a negative way. Lenders typically view excess debt as a sign of potential financial instability for the individual. Credit scores can be improved by simply using your credit card wisely. By only spending as much as you can pay off each month, and then doing so, you can improve your credit ratings drastically. Though this may take some time, improvements in your score is a definite result.

Lenders typically prefer individuals whom they believe are financially responsible. Simply paying your credit card bills promptly and staying within your spending limits will show this sense of financial responsibility. Simply following such simple instructions will eventually lead to a good credit score. Unfortunately, it is increasingly difficult for consumers with poor credit to apply for a credit card. Even if one is available to them, they are often riddled with high interest rates and limited incentives.

Still these high interest cards can help you improve your credit score. If you are adamant in paying off your full balances every month, interest rates have little impact. By not carrying a balance, cardholders would not have to worry about the interest rates at all. With a better credit scores, more attractive credit card offers will follow. Credit card offers with low interest rates and lucrative rewards programs are often given to those with good credit.

How to Handle Credit Card Debt

Admin — Mon, 20 Dec 2010 00:00:00 GMT

The pure convenience of credit cards has drastically changed our spending habits and lives. In spite of the benefits, credit cards also come with the dangers of uncontrollable debt. Before applying for a credit card, one should consider their current financial standings and whether or not they actually need a credit card.

When dealing with personal finances, one should treat it similarly to running a business. You should carefully examine all incoming and outgoing transactions for accuracy and determine if they are necessary in your life. Individuals should also categorize your finances into four specific groups (debts, expenses, income, and assets). With this wealth of information, you can easily set yourself goals and assign certain spending limits. Carefully following these guidelines, you can slowly see your assets increase while your debts decrease.

If you do plan to apply for a credit card, research your options carefully. Try to find cards with reasonable interest rates and try to avoid 0% cards with hidden conditions. Conversely, individuals should also be careful of credit cards with high fees and interest rates. In any circumstances, it is advisable to carefully read the fine print. Once the card is at hand, try to limit its use for emergencies only. You should also strive to pay your monthly credit cards in full, each and every month.

If you have already found yourself in credit card debt, you should first analyze your personal finances and determine how much you can afford every month. Tracking your daily spending for the month and categorizing your expense priority is an invaluable too. If your credit card debt is spread out among several different cards, you should pay off the accounts in the order from highest to lowest interest.

Things That Will Devastate Your Credit Score

Admin — Mon, 20 Dec 2010 00:00:00 GMT

The majority of people know the basics in retaining a good credit score. Making minimum payments, avoiding bankruptcy and foreclosures are all well-known actions that will ruin a credit rating. There are also some less common actions that can have a negative impact on your credit score. Several of which will be discussed here in this article.

Some consumers may not know that settling overdue debts with a creditor by negotiating a lower balance can lower your credit score. Sometimes debt negotiation claims may just be too good to be true. Often times, debt holders are unaware of its negative impacts. CEO of NerdWallet, Tim Chen commented, "Even though you're getting rid of bad debt, it stays on your report as 'settled' rather than 'paid off,' and is now updated on the payment date, making it look like it happened more recently than the original loan. Your credit score is weighted more heavily toward recent events than past events, so taking a bad debt from the past and moving it to the present will count against you.”

Alternatively, transferring balances for a high interest account to one with lower interest can also negatively affect your credit rating. Though balance transfers may seem like a good way to pay off debt quickly and with little or no interest, Chen says, "While it's better for your bottom line, opening new accounts works against your credit score. Plus moving all your debts to one card could negatively impact your credit utilization."

Once a balance is paid off, cardholders often close the credit card accounts to avoid further temptation and a chance of getting back into debt. Unfortunately, doing so may also shorten your credit history length or increase your debt utilization ration. Both of which will definitely lower your credit score. Chen says, "Creditors like to see that you have a lot of unused, available credit, and that you have accounts that have been open for a long time without problems.”

Although it may sound counterintuitive, paying off your mortgage or car loan can also lower your credit score. Due to the fact that ten percent of your FICO score is determined by the variety in your credit history, paying off these revolving loans will lower your credit rating slightly.

Credit Card Loyalty Programs Underestimated

Admin — Sat, 11 Dec 2010 00:00:00 GMT

According to a study conducted by Mintel Comperemedia, a credit cards instant rewards program is the primary motivation for consumers to apply for a specific credit card or retail store loyalty program. Mintel researchers concluded some of the reward prospects that build strong loyalty to banks and retailers.

Mintel's research found consumers are more geared towards credit card reward programs that they can use with everyday purchases. Credit card processing fees are often seen by critics to encourage retailers to increase the cost of goods to justify the expenses. Conversely, retail analysts believe that loyalty programs can reduce retailer's marketing expenses thereby offsetting the cost of interchange fees.

According to the study, American consumers are beginning to be less fond of frequent flyer reward programs. Fewer than ten percent of respondents told Mintel researchers that their spending is based on obtaining airline miles. Most found that saving up frequent flyer miles has become a chore and less rewarding.

Credit card companies have recently focused on offering time-sensitive, unique experiences involving cultural events, professional sports, and luxury destinations. Discover’s sponsorship of the Orange Bowl and NFL’s reinvention of its affinity credit card partnership with Barclays allow football fans to get up close and personal with players. American Express allows ZYNC cardmembers to pick their own favorite reward experiences, ranging from art museum tours to food and wine tastings.

Even with the allegations from policymakers that retailers increase prices to support these reward programs, Mintel concluded that most consumers prefer these special incentives versus everyday lower prices. The idea of finding unadvertised bargains is more exciting to consumers compared to getting prices throughout. It is predicted that if rewards programs vanished tomorrow, consumers would demand similar incentives from retailers.

Tips for Holiday Shopping

Admin — Sat, 11 Dec 2010 00:00:00 GMT

Citizens Bank of Pennsylvania has some excellent holiday shopping tips for consumers that can help them better manage spending and establish a budget for this shopping season. Citizens hope the suggestions will allow consumers to stay out of debt.

"While there are signs of an improving economy, we're expecting the holiday shopping season once again may be difficult for some families," said Daniel K. Fitzpatrick, Citizens Bank's president and CEO for Pennsylvania, New Jersey and Delaware. "Everyone should take some time to plan ahead and take a more disciplined approach to spending. That will pay off all year long."

Below are some shopping suggestions for Citizens Bank.

One of the primary goals is to determine a spending budget. Having a spending limit will help shoppers avoid impulse purchases.

Secondly, consumers should make a list of all the organizations and people you wish to shop for this holiday. Everyone should be assigned a spending limit and the list should be with you when you do your shopping.

It is never wise to bring all your credit cards. The more credit cards you have, the more likely you will indulge. Bring one or two credit cards and leave the others at home. It is also advisable to pick and choose your cards carefully, and use the ones that best benefits you. Either choose to use a card with low interest rates if you plan to hold a balance or use one with high rewards if you usually pay off your bills monthly.

Debit cards can also be a good alternative to credit cards. Since you are essentially spending money you already have, it will be more difficult to get yourself into debt. Debit cards are also safer than carrying cash.

Finally, shoppers should consider starting a savings plan. Having an automatic savings account will better prepare you for next year's holiday season.

National Debt Relief Program Offer Consolidation Tips

Admin — Sat, 11 Dec 2010 00:00:00 GMT

Due to the recent recession, debt relief and credit card debt consolidations programs has been growing in popularity among consumers. For those looking to enroll in such programs, there are a few immediate advantages they will seek. Saving money on interest rates by consolidating different accounts, consolidating loans with a fixed interest rate, or negotiating to a lower settlement balance are some of the primary goals of these programs.

The more straightforward approach to relinquish credit card debt is to simply not use the cards and pay off the loan. This is typically easier said than done. For many, it is simply too difficult to fight the temptation. Most individuals will keep a single credit card on hand for emergency situations and find it maxed out again a few months down the line. Cardholders often find themselves in the same or worst predicament than before.

This credit card debt consolidation cycle usually repeats a few times before the cardholder realizes their situation. By this time, their debt amount has reached uncontrollable levels. This scenario is more commonly know n as "the middle class trap".

Credit card consolidation can also be accomplished by transferring all balances to another card offering a promotional zero percent APR. This will allow cardholders adequate time to pay off reasonably sized balances without the additional strain of interest payments. Obviously, the person must refrain from adding additional debt to the balance owed and fall into the middle class trap.

Credit debt relief can also be accomplished through negotiations to lower credit card debt, interest rates and fees. Ultimately, the best solution would be to plan and practice a self-made payment schedule, which does not involve paying for additional services and fees.

Holiday Hangovers from Store Credit Cards

Admin — Sat, 11 Dec 2010 00:00:00 GMT

It is a common practice for department stores to offer tempting discounts on a purchase for applying for one of their store branded credit cards. Though these offers may seem lucrative, experts agree that consumers should generally avoid store credit cards. Store branded credit cards typically have high interest rates and can often be detrimental to a person's credit score while exposing them to identity theft.

Chief executive of LowCards.com, Bill Hardekopf said, "Many store credit cards offer nice incentives — like free gift wrap with a Macy’s card — but what comes with them, in most cases, is an outrageously high interest rate.”

According to a study conducted by U.S. Rep. Anthony Weiner, the average annual percentage rate of store credit cars is 23.83 percent. In comparison, the average interest rate for bank issued credit cars is 13.81 percent.

Cristy Cash, director of counseling for Consumer Credit Counseling Service of Oklahoma commented, "If you charge $500 of merchandise on a store credit card with a 21 percent interest rate and make only minimum payments, it’ll take you 10 years to pay it off and you’ll spend another $700 in interest." "And that’s if you can resist the additional coupons and promotions the company sends you and never charge anything else on the card.”

Cash also added that a credit card application or credit inquiry could lower a person's credit score by up to thirty points. Debt to credit ratio dictates thirty percent of a person's credit score while their payment history makes for thirty-five percent. With this in mind, a single late payment can drop a FICO score by as much as 120 points. In addition, because store credit cards typically have low limits, the debt to credit ratio can easily be impacted. Cash added, "If your credit limit is $500 and you charge more than $250, get ready for your score to drop.”

Negative effects on a person's credit score can make it difficult for individuals to apply for a home loan. A mortgage banker with Bank of Oklahoma, Linda Turner said, "Adding new debt may lower your score enough to cost you thousands in closing costs or increase the debt-to-income ratio enough to where you could not qualify for the loan.”

Cartoon Characters to Sell Prepaid Cards to Teenagers

Admin — Sat, 11 Dec 2010 00:00:00 GMT

Myplash began offering Teen Prepaid Mastercards, which seems to coincide with the holiday season. What is unique about these cards is that there are almost a hundred different card designs with movie characters, athletes, musicians, and cartoon characters. Introduced by Plastic Cash International, these cards contain images which include Paul Frank, Emily Strange, Plain White Ts, Rich Boy, Flo Rida, Skelanimals, So So Happy, Twilight characters, and Kassia Meador. This is Myplash’s latest attempt to brand their cards to teens and young adults.

Fees for the Myplash cards are average. The monthly fee is $4.95, activation fee is $6.95, and reload fee is $4.95. The cards do have a $1.95 inactivity fee and a $2.00 paper statement fee. Contacting customer service will cost $1.50 via email and $1.95 with a phone. Transferring finances to another Myplash card will cost $0.50. per transfer. Electronic bill pay will cost $0.50 per transaction and disputes will cost $15 per transaction. Overall, the Myplash card service charges are fairly standard.

Teenagers between the ages of thirteen and seventeen will require parental consent before applying for the cards.
The credit card industry is struggling to attract new customers that may have been hindered by the CARD Act. Young adults and teenagers seem to be the new targets. The CARD Act restricted anyone under the age of twenty-one from obtaining a credit card. Prepaid cards are now easier for young individuals to obtain. Prepaid cards are a great option for those who have poor credit or are too young to apply for a credit card. Before getting a prepaid card, it is important to compare the different fees offered. Though prepaid cards can be a good alternative to debit and credit cards, the associated fees can make them fairly expensive. Prepaid card issuers generate revenue through these fees. Regulations limiting fees for debit and credit cards do not apply to prepaid cars.

Discover Sued Over Unauthorized Charges

Admin — Sat, 11 Dec 2010 00:00:00 GMT

A lawsuit was filed against Discover by Minnesota Attorney General Lori Swanson on Monday. The suit is based on alleged claims that the credit card company had charged its cardholders for unauthorized account protection programs such as credit score monitoring and identity theft protection.

“The company charged some consumers for expensive add-on financial products without their understanding that their credit cards would be charged,” Swanson said. “The irony is that the credit card company markets these products as a way for consumers to protect themselves from fraudulent or unauthorized credit card charges and financial instability in the bad economy.”

The lawsuit took place Monday in Hennepin County District Court. It was filed against Discover Bank, DFS Services and parent company Discover Financial Services. Discover is one of the more dominant credit card issuers in the United States. One in four households use their cars with over fifty four million cards issued.

The lawsuit claims Discover earned approximately three hundred million dollars annually in 2009 from the sale of account additions. This is an increase from the eighty million dollars earned from 2007. The discussed earnings are on top the of revenue generated by what Discover charges customers for penalty fees and interest.

It is claimed that most customers were in the impression that they were receiving courtesy calls but in fact was unknowingly being enrolled in such programs.

Relieve Credit Card Stress with a Rate Reduction

Admin — Sat, 11 Dec 2010 00:00:00 GMT

People with financial difficulties should consider negotiating your rates with your credit card provider. Though it can be uncomfortable for many, some creditors are often willing to make concessions. At times, the provider will suspend charging privileges along with the reduced interest rate. This is extremely reasonable, since it would be ill advised for a person with financial difficulty to continue adding to their balances. Doing so will only make matters worse and not better.

After negotiating an offer, many individuals find themselves debating on whether they should go with the offers and conditions or keep things the way they were. For these people, they should ask themselves if the proposed concession would really make a difference for them. They should also ask themselves if they could restrain from adding to their debt.

In reality, the lowered interest rate offered by credit card issuers typically makes very little difference in a person's monthly payments. It usually involves more money going towards paying off your balance, which will in turn shorten the time needed to pay off the money owed. Depending on the amount owed, the drop in interest rate, and the promotional period given some might not see drastic benefits in taking up the offers.

Still, a lowered interest rate is always advantageous to some degree. A lowered rate combined with an increased ability to pay larger monthly payments will allow individuals to quickly relinquish their credit card debt. For those still in debate with their payoff strategy, nonprofit credit counseling services are available.

How a Credit Score Can be Damaging

Admin — Sat, 11 Dec 2010 00:00:00 GMT

Credit scores are typically used by banks as the determining factor in approving car loans, credit card terms, and mortgage rates for an individual. This is the reason why it is vital for people to keep track of their credit scores. All too often, consumers are inexperienced and unknowing of the workings of a credit score. Although not everyone needs to be an expert, everyone should be armed with a few simple facts.

The federal Fair Credit Reporting Act of 2005 mandates that all American consumers be given one free credit report a year from each of the nationwide consumer report agencies. A free credit report can be acquired from Experian, Equifax and TransUnion at no charge. Most credit scores are based upon a Fair Issac Corporation (FICO) score. The score ranges from three hundred to eight hundred and fifty for a perfect score. Consumers should know that each credit-reporting bureau will have a different score for them.

Credit agencies calculate your credit score by adding and subtracting points based of different factors. Typically, your payment history will attribute to thirty five percent of your score. Another thirty percent is based on the amount of money you owe. Your credit history contributes fifteen percent and your newly opened credit dictates ten percent. The remaining ten percent is determined by the type of credit you carry.

Different thresholds that direct financial institution decisions are also another vital piece of information. Vice president of education for Consumer Credit Counseling Service in Dallas, Todd Mark said, "A few years ago, it used to be that 700 was really the barrier for getting approved for the best rates and products. A goal line now is 760 to ensure getting approved for the best rates and products with the floor at 600 to 620, that is up from 500 five years ago."

Aside from well-known information that can negatively influence your credit score, there are a host of other information many do not know. Soft inquires, hard inquiries, and credit utilization ratios are all terminology consumers should be familiar with when dealing with their credit score.

Low Priced Items Charged on Credit Cards

Admin — Sat, 11 Dec 2010 00:00:00 GMT

New Zealand consumers seem to be spending less per average credit card transactions. Albert Naffah, Mastercard's country manager, reported that the average transaction on electronic payment cards fell from $55.31 to $51.86 during the course of the last three years. Many New Zealanders are more comfortable using credit cards for buying low cost items.

Mr Naffah said, "New Zealand has always had a pretty good culture of putting anything on `plastic', from your litre of milk all the way up to big ticket items, and that's continuing.''

Naffah continued to suggest that the number of transactions or growing disproportionally faster than the value of the transactions. Statistics show the number of transactions increased by six million to one hundred million for October while the transaction amounts increased by $218 million to $5.035 billion for that same month.

Mr. Naffah suggests that the increase acceptance of credit cards in generally what is fueling the increase in small transactions. "Kiwis tend to use credit cards like debit cards. They have among the highest level of repayments of any comparative country in the world. They use their credit cards as a payment tool as opposed to a debt vehicle, so I don't think debit cards are a factor.''

The increase in debit card use can be attributed to lower confidence during the economic recession. Though Mastercard currently does not issue debit cards in New Zealand, this is expected to change. New Zealanders can be seen cutting credit card use in an attempt to reduce personal debt.

It is still uncertain how businesses ability to levy credit card surcharges will affect spending practices. Because of the settlement with the Commerce Commissions the previous year, businesses are now able to pass on a surcharge to customers who use credit cards.

Mr. Naffah does not believe the extra surcharges to be a friendly experience for consumers and business.

Take Caution with Using Credit Cards with No Spending Limits

Admin — Sat, 11 Dec 2010 00:00:00 GMT

Many cardholders do not know that using certain credit cards with no spending limits can have a negative impact on your credit score. Cards such as Visa Signature or World MasterCard can affect your credit utilization ratio, which is a key component in determining your credit score.

To determine if your credit card may be damaging to your credit score, you would need to understand how the issuer reports transactions to the credit bureaus. If the issuer reports the card as an open account, your credit utilization would not be impacted. However, some credit card companies report these no limit cards as being revolving accounts with a credit limit of the highest balance within a given time period. Doing so can have great detrimental effects on a person's credit score.

Credit card comparison sites, such as CardHub.com, help consumers determine which cards can have a negative impact on their credit score. They also rank different credit card providers in terms of consumer-friendliness. Based on their study Chase, Citibank and American Express received good ratings. On the other hand Capital One, Wells Fargo, USAA and Bank of America received only fair ratings.

Chief executive officer of CardHub.com, Odysseas Papadimitriou said, "May advice is just don't use such cards."There is just so much diversity” in how issuers report the information and “the issuers can change what they report and how they report it at any point in time and they don’t have to notify you.”

Even so, many card issuers insist their reporting methods follow industry guidelines. Capital One spokeswoman, Pam Girardo said, "Reporting credit limits on these accounts is a regulatory expectation." “Our approach is supported by the industry standard reporting guidelines, which are published by a consortium of the credit bureaus,” she said, adding that “while we don’t control or necessarily even have insight into third party credit-scoring models, we don’t believe our reporting has a negative impact on the higher spend transactors that are the target audience for these cards.”

Increase Credit Card Solicitation

Admin — Mon, 06 Dec 2010 00:00:00 GMT

Recent statistics have shown credit card offers are returning in the United States in a big way.

During the peak of the financial dilemma, direct mail targeted credit card offers diminished. Many will have noticed receiving fewer of them in the mail. Another occurrence that seems all too common is the rejection of credit card applications. A great number of people online and with outstanding credit complained on credit forums that they were being rejected for mediocre credit cards.

These were results of increased fears in the lending industry. To banks, lending money to consumers just did not seem prosperous or sensible. It made much more sense for them to simply borrow government money at near zero interest and shovel it into T-bills.

However, this seems to be changing. Pre-approved credit card offers can be seen abundantly in the mail at this time. Some of these offers are even fairly tempting. Such banks as Citigroup Inc. had offered a twenty-one month zero interest introductory APR balance transfer option for new Citi Platinum Select cardholders. This offer has currently been increase to a twenty-four month promotional period.

Alternatively, Bank of America's BankAmericard Visa gives new cardholders zero percent introductory APR on balance transfers for the first nine twelve months. The length of the promotional period is dependent on the applicant's credit history.

These are good signs that the economy is starting to recover. Jobless rates continue to maintain its posture while banks continue to show an increased interest in lending money to consumers.

Beware of Credit Card Fee's Hidden Agenda

Admin — Mon, 06 Dec 2010 00:00:00 GMT

With the newly implemented credit card rules, a majority of cardholders will be able to avoid retroactive interest rate increases on existing card balances, have more time to pay their bills, greater advance notice of changes in credit card policies, and the option to cancel accounts if the new conditions are not to their liking. These changes will increase the transparency in credit card agreements and allow consumers to better compare credit card offerings.

Based on the new regulations, credit card issuers are forbidden to charge more than $25 in late fees. This is unless the account holder has been late more than once in a six-month period. In addition, late fees can no longer amount more than the minimum monthly payment. Providers will not be able to charge a $25 late fee for overdue minimum payment of $10.

Consumer psychologist Kit Yarrow commented, "It’s a battle between retailers and consumers. Retailers make more money when consumers spend on their credit cards, so they offer good incentives in a quest to get people to use the store credit cards. It’s only natural that consumers be enticed by that, especially at a time when we’re more cost-conscious."

There is a growing trend among consumers to switch to smaller community banks and credit unions. This is fueled by discontent of the recent changes being imposed by larger banks. Smaller banks and credit unions typically have better incentives and deals. As study conducted by Zogby International concluded that fourteen percent of Americans have moved over to smaller community banks or credit unions last year. Of these individuals, sixty percent said the reasoning behind their move is to protest the unethical practices of larger national banks. Others attribute lower service charges and interest rates as being the motivating factor.

Fraud Rate for Credit Cards Fall

Admin — Mon, 06 Dec 2010 00:00:00 GMT

Credit card fraud rates fell thirty-six percent this year compared to the last. This is accordance to statistics provided by the SA Banking Information Centre on Monday.

Sabric CEO Kalyani Pillay said in a statement, "Even more noteworthy is that the industry experienced this decrease, despite the high volumes of financial activity in our sector during the country’s hosting of the Fifa 2010 World Cup."

Nevertheless, credit card fraud in South Africa was increasing at a rate greater than other countries.

“Most of the cross-border fraud is committed in the United Kingdom, USA, Australia, France and China.”

Card skimming is the primary type of card fraud in the last three years. With card skimming, information on the magnetic strip is stolen using small devices. This type of theft accounted for R141.4 million in losses this year though the frequency of these crimes has fallen thirty-two percent.

Pillay added, "While significant progress has been made on this front, we now have to contend with a new era of skimming that involves devices mounted onto ATMs.” “Although the usage of ATM-mounted skimming devices is not yet prevalent in most parts of the country, this trend is definitely of concern and the banks are already deploying various inter-bank strategies to ensure that customers do not fall victim.”

The use of lost and stolen cards feel sixty percent compared to the year before.

Pillay said, "At the same time, false application fraud and account takeover fraud have decreased by 91 percent and 71 percent respectively.”

Credit Cards Can Double Your Warranty

Admin — Mon, 06 Dec 2010 00:00:00 GMT

Often, buying electronics involves offers to extend the default warranty policies on your item. Most of the offers are not worth getting unless they are free or close to it. A good alternative is to make your purchases using a credit card that automatically doubles the standard warranty period. American Express has Buyers Assurance programs that do this with most of their credit cards. Visa's Warranty Manger Service and MasterCard's extended-warranty coverage provides similar benefits to the consumer.

To take advantage of these extended warranty programs, it is important for consumers to keep the original receipt. If the purchased electronic is faulty and needs repair, first contact the credit card issuer. You would then wait for the issuer to cover the cost of the service before initiating any repairs. Many times, warranty repairs by the credit card company may even provide a better choice of repair facilities that the manufacturer's own extended warranty programs.

Closing Card Accounts and its Impact on Credit Scores

Admin — Mon, 06 Dec 2010 00:00:00 GMT

Those who have achieved the victory of being free from credit card debt may wonder if closing their credit card accounts is the right thing to do. Removing the source of temptation may eliminate the chances of going back into debt but may also affect your credit score as well. The answer to this question is greatly dependant of what the cardholder is trying to achieve. Those wanting to get rid of the temptation of excess credit and those looking to raise their credit score will have two different approaches.

Closing the credit card accounts will indeed lower your credit score. This happens for two reasons. First of all, fifteen percent of your FICO score is dependent on your credit history. Closing zero balanced accounts that you have had for a long period will definitely influence your credit score.

How much you owe dictates another thirty percent of your FICO credit score. One key factor considered is an individual's credit utilization ration. This is the ratio of credit available in relation to credit used by a consumer. By closing paid off credit card accounts, you are essentially increasing the ratio of debt to available credit. That again can be detrimental to your credit score.

On the contrary, if your primary focus is not in increasing your credit score the excess credit card accounts should be closed to prevent you into stepping back into debt. Whether you have the needed self control to not use a card available to you is all up to the individual.

Those who have no more uses for the cards are recommended to simply close the accounts. Although your credit score may decrease slightly, it is just a short-term affect. Closing accounts you have no use for can help you accomplish your financial goals.

Are Computerized Credit Cards Advantageous?

Admin — Mon, 06 Dec 2010 00:00:00 GMT

Certain banks, like Citibank, are testing out the next generation in credit cards. These amazing little devices are packed with technology such as lights, buttons, embedded computer chips, and micro thin battery that lasts for years.

The buttons on the Citibank cards allow the cardholder to choose between paying for their purchases using the normal credit card process or through their reward points. Having this option available will ultimately mean consumers have to keep careful record of their reward points. If the purchased item requires more points than the cardholder have, the entire purchase amount will be charged as credit. For those consumers hoping to stick within a budget, this can be an issue.

Allowing cardholders to instantly use their reward points can have other negative impacts as well. With the added convenience, consumers may be keener on using their credit cards, which can lead to a thirty percent increase in spending. Consumers tend to be more financially aware when they are using cash versus a credit card.

Whether these new credit card features will be beneficially will ultimately depend on the consumer. Having the experience of instant gratification tends to increase credit card usage among cardholders. This is an outcome sought after by the credit card companies. However, this can also result in an increase in debt to consumers already struggling in a gloomy economy.

It is very likely the implementation of these new credit cards will result in policy changes in regards to point expirations. Card providers will most likely make changes to expiration dates in the hopes that consumers spend their points quicker. Due to higher manufacturing costs of these credit cards, consumers can also look forward to increases in fees to justify the expenses.

Using Credit Cards over Debit Cards

Admin — Mon, 06 Dec 2010 00:00:00 GMT

When used correctly, credit cards can be an invaluable tool. Credit cards are great for financial emergencies by allowing us to spend money we do not have. On the other hand, the use of debit cards is much more financially responsible. With debit cards, you are only using finances you already have which can help individuals avoid debt. Each card is ideal for use with certain circumstances.

Though debit cards are considered safer because it less likely to put people into debt, debit card holders may not be reducing their risk of financial problems. They do restrict your spending by automatically limiting you to finances you have already allocated to the card. Debit cards are a reasonable way to manage your money. In addition, debit cards do not charge interest on purchases so are less costly to use compared to credit cards.

Credit cards have their advantages as well. For those looking to manage their finances, a credit card is still advised for emergency circumstances. There are also instances where credit cards may be advantageous over debit cards. Most purchases made by credit cards are protected under the Consumer Credit Act. Essentially, this means that if you are not satisfied with a purchase you have made, you may be able to claim the money back from your credit card provider. This feature makes credit cards ideal for dispensable spending. To avoid putting yourself into debt, card holders should have a predetermined pay off budget before making any major purchases with a credit card.

Credit Card Debt Left by the DEAD

Admin — Mon, 06 Dec 2010 00:00:00 GMT

Dying Americans leaving credit card debt behind seems to be an escalating problem in the United States. What is more concerning is that a majority of the people simply do not care. A recent study showed that approximately forty percent of Americans acquired credit card debt after they retired. Of these individuals, none intends to pay back these debts before they die.

Ed Ingold, age 73, has a variety of credit cards. Ingold said, "I have 'em all. A Discover, a Visa, a MasterCard, Walmart. But you have to be controlling. Any debt I have, I try to pay off. Credit card, I try to pay it off, monthly, or it could be a fortune."

Though Ingold is cautious in managing his spending, the number of retired Americans with credit card debt is disturbing.

Estate Planning Attorney Greg Kimmel commented, "I think the idea of retirement is at the forefront of lots of people's minds. But, a lot of people are retiring who can't afford retirement."

Of the individuals surveyed, over half claimed they saved less than $50,000 for retirement. A great number said they saved nothing at all. Only four percent of Americans said they postponed retirement due to debt.

"I don't know what would convince someone that they could retire, lose their income, when all they have is $50,000 or nothing in the bank," Kimmel said.

Though their children are not legally obligated to paying off their parent's credit card debt, many creditors will find other methods of getting the money, which can affect the entire family.

"That debt is usually paid at the expense of someone's inheritance, and also, it can force the sale of family assets like family property or family business," Kimmel said.

Kimmel suggests that the elderly should be financially sound before retirement. Individuals should strive to pay off any remaining debt before going down that path. Government benefits are also available to ease the financial responsibility for senior citizens.

New Legislation Changes Gift Card Policies

Admin — Mon, 06 Dec 2010 00:00:00 GMT

A new law enacted by the Credit CARD Act aims to make gift cards more consumer friendly this holiday season. The new regulations require gift card issuers to have gift card expiration dates be no less than five years. It also prohibits card issuers from implementing an inactivity fee unless the card has not been used for at least a year. Gift card issuers can no longer charge a replacement fee for stolen or lost cards.

For Chalona Haskins, this is excellent news. She is well aware of how often gift cards expire and how much inactivity fees can accumulate. Haskins said, "I have friends that say they've had gift cards from last Christmas and hadn't used them yet and now can't use them because they expired."

Although these changes are greatly beneficial to the consumers, those considering purchasing gift cards this year should still be aware of their many drawbacks. For instance, many cards have purchase fees that can range from three to seven dollars. Consumers should also be aware that though inactivity fees are restricted, that are not eliminated and still can be imposed. There are certain gift cards available that does not impose inactivity fees. American Express would be an example.

Buyers should also take caution in buying gift cards from businesses in financial trouble. The CARD Act has no provisions that will protect consumers in these circumstances.

Credit Card Information You Should Know

Admin — Mon, 29 Nov 2010 00:00:00 GMT

The Federal Reserve issued a set of credit card rules and guidelines aimed at assisting and informing consumers back in 2010. The latest of this Consumer’s Guide to Credit Reports and Credit Scores was released a week before.

The consumer’s guide contain some basic information in regards to credit scores which explains what it is, it’s significance, and where it can be used. The guide was issued in accordance to the Fair Credit Reporting Act (FCRA), which is planned to go into effect January of 2011.

The FCRA was actually passed in 2003 and required creditors to adequately inform consumers of the negative impacts of a low credit score, such as higher interest rates. The piece of legislation also requires consumers to be notified if employment or insurance is denied due to information in the credit report. When a consumer is negatively impacted by a credit report, the lender, employer, or association is required to notify them of the credit bureau, which provided the report and was relevant in the decision making process. The consumer is than obligated to a complimentary credit report from this credit bureau.

The Federal Reserve hopes FCRA policies will persuade consumers to be more involved in determining the accuracy of their own credit reports.

The updated Consumer’s Guide to Credit Reports and Credit Scores hopes to assist consumers in comprehending the new information and notices they are obligated to get from lenders under the FCRA rules.

A credit report can be vitally important for an individual. It summarizes your financial story while identifying who you are and where you live. Detailed aspects of past and current loans are provided to lenders and businesses. Much personal information such as court judgments and bankruptcies are also open to any association requesting your credit report.

“People are surprised when they discover how deeply and broadly credit reports can affect their lives,” said Bill Hardekopf, CEO of LowCards.com and author of The Credit Card Guidebook. “Every consumer needs to understand how their actions affect their credit report.”

Higher Interest Rates on Retailer Credit Cards

Admin — Mon, 29 Nov 2010 00:00:00 GMT

A new study concluded that retailer credit cards had typically higher interest rates than traditional cards. The survey was conducted by U.S. Representative Anthony Weiner’s office. It involved thirty-five major retailers in New York City and found the average store-issued accounts to have any interest rate of 23.83 percent. The average has increased from two years ago in which the average APR for these cards were at 21.71 percent. Both figures are considerably higher than the current national average rate of 14.78 percent for bank issued credit cards.

Programs director for Consumers Union, Chuck Bell commented, “As this survey demonstrates, store charge cards can be very expensive if you don’t pay the bill in full every month.” Bell also added, “Consumers need to be aware that store cards usually carry sharply higher interest rates than ordinary credit cards. Don’t succumb to high-pressure holiday pitches to open up a new store account without carefully checking the interest rate, penalty and late fees, and other fine print.”

With an APR of 28.99 percent, the study found Radio Shack’s accounts to carry the highest interest rate on their credit cards. Staples and Best Buy were not that much better. Both store issued credit cards had rates of 27.99 percent. This is followed closely by Sears and Home Depot, both of which had interest rates over twenty-five percent.

The study also concluded that most of these retailer credit cards offered introductory deals and promotional interest rates to captivate their customers. Consequently, these offers were also riddled with conditions and fine print that saw retroactive interest rates applied to debt that has not been paid off within a certain time period.

The federal government has already enacted the Credit Card Accountability, Responsibility and Disclosure (CARD) Act, in the hopes to reduce these unethical lending practices.

Federal Reserve Closes Loopholes in the Credit Card Act

Admin — Mon, 29 Nov 2010 00:00:00 GMT

The Federal Reserve announced recent amendments to the CARD Act. These changes are aimed to close certain loopholes within the credit card laws and regulations.

The changes primarily clarify languages or terminologies within the legislation that may have been deemed vague or be misinterpreted. An example would be the clause that prohibits credit card companies from charging cardholders more than twenty-five percent of the cards credit limit during the first year an account is open. Before the proposed changes, banks have tried to sidestep the law by charging a processing fee, which they claimed, is acceptable since it is charged before the account is established. Doing so will allow credit card companies to continuingly charge ridiculous amounts thereby increasing their revenues.

The proposed changes by the Federal Reserve hopes to close this loophole by clarifying that all fees, whether charged before or after an account is opened, will be included towards the twenty-five percent limit.

Another example involves how the CARD Act originally forbids credit card issuers from changing interest rates on existing accounts unless a cardholder is sixty days late in their payment. Again, credit card companies tried to manipulate the law by using the term “interest waiver” instead of “introductory APR.” The offering of interest waivers allows the banks to revoke the waivers at their discretion.

Again, the Fed rejects the distinction between the two terminologies and extends the restrictions to interest waivers as well.

The update to the Federal Reserve’s CARD Act also mandates the use of individual income versus household income to determine a consumer’s financial qualifications. By doing so, consumers are protected for access to lines of credit beyond their economic capabilities. It also protects taxpayers by regulating banks and poor lending standards.

These changes are expected to go into effect around October 2011. Although the changes are not revolutionary, they are necessary in continuingly increased protection of consumers from illegal and unethical practices by the credit card companies.

Consumer Debt Decreases as More Seek Credit Card Debt Help

Admin — Mon, 29 Nov 2010 00:00:00 GMT

A report released by the Federal Reserve of New York indicated that revolving credit has fallen by twelve percent in the United States. Credit card debt accounts for a significant portion of revolving debt. The report generally means that American consumers are aware of the dire consequences of credit card debt and is continuingly working on reducing their standing balances.
A great number of consumers are reducing their debt by traditional methods. They are saving up and diligently paying of their credit card balances. Others have found a more innovative approach by seeking the help of professional credit card debt relief services. These services and programs have been estimated to have reduced national debt amounts by millions of dollars.
Consumers who are having difficulty paying off their debt should know that they are not alone. Millions of Americans are struggling with paying off their credit cards. These troubled individuals should seek assistance from debt settlement programs aimed to reduce credit card debt and achieve debt relief.
With guided negotiations, most creditors are willing to work with cardholders in order to reach a mutual agreement in paying off uncollected debt. Debt settlement companies are leading the way in these kinds of negotiations and typically have relations with major banks and creditors.
With settlement programs, debtors make payments to the settlement company, which will in turn pay creditors. The benefit of this process is that consumers can avoid bankruptcy.
Yet, consumers should know that these programs might have negative impacts on their credit scores. However, contrary to bankruptcy, the debtor can immediately work at fixing their credit score immediately after the debt is paid off. Some settlement companies can also give recommendations to credit repair companies.

Tips to Reducing Interest Rates on Multiple Credit Cards

Admin — Mon, 29 Nov 2010 00:00:00 GMT

Managing credit card debt can be infinitely more difficult when you are dealing with multiple credit cards. Different interest rates and monthly payment amounts greatly complicate things. Discussed will be a few proven methods for negotiating a lower interest rate and paying of credit card debt.

It is clear that a majority of Americans are greatly dependant on their credit cards. It is estimated that American consumers have, on the average, nine credit cards. In the past, lenient credit card lending standards has given consumers limitless credit, which many cannot afford. As a result, a record number of consumers are finding themselves in credit card debt. Those who can only afford making the minimum payments on these credit cards may find the numbers disturbing. By making just the minimum payments, ninety percent of the payments are for interest while only a mere ten percent goes to paying off the debt. A simple $500 in purchases can easily add up to $3,000 in interest on a high APR card.

If you find it increasingly difficult to pay off your credit card debt, your best bet is to negotiate with your creditor. This can be done yourself or with the assistance of a professional program. Recently enacted federal laws has made in increasingly more beneficial to seek help from professional debt relief services. With these new laws, participants would not have to pay any fees until the actual debt amount is settled. Many of these services should be able to reduce your balance by up to sixty percent.

It is important to compare debt settlement companies to see which one better suits your needs and are best performing as far as debt reduction. Free debt relief networks are available to help consumers find the companies that are besting performing in their specific area. Such services provided by FreeDebtSettlementAdvice.com are free of charge.

Improve Your Credit Score before Applying for A New Card

Admin — Mon, 29 Nov 2010 00:00:00 GMT

Those tempted with taking up the numerous credit card offers in the mail should be realistic about their chances of qualifying. CEO of LowCards.com, Bill Hardekopf, suggests an increase in offers and credit card solicitations simply means the credit card industry is doing well.

Hardekopf said, “They are once again aggressively pursuing new customers, but this time around they seem to really be focusing on those with good or excellent credit scores."

Though applying for a new credit card these days may be more difficult, it is far from being impossible. Those thinking of applying should first obtain a copy of their credit report and their FICO credit score. Your credit score should guild an individual towards which type of credit card to apply. Those with a lower credit score should check their credit report for mistakes or discrepancies and fix them when necessary. Low scores can be detrimental for consumers looking for a good credit card with low interest rates.

Hardekopf commented, “If your FICO score is 750 or above, you should apply for the cards specifically offered for excellent credit. A score of 720 or above is considered good credit; 660 to 720 are acceptable." Those with scores below 650 are considered the subprime category and will have much more difficulty in being approved.

"Anything below a 650 FICO score seems to be the dividing line between prime and subprime," said John Ulzheimer, president of consumer education at Credit.com. According to studies conducted by the company, approximately thirty five percent of consumers are in this category as of April. Ulzheimer added, “Scores below 650 are there for a reason. It's negative information, such as late payments, foreclosures, bankruptcy, tax liens, hitting your credit report and excessive credit card debt."

Hardekopf said, "Consumers should not waste their time and apply for a card for which they are not qualified. If you apply for too many credit cards at once, this is a red flag and may actually cause your score to drop."

Your credit card payment practices should also determine the type of credit card you should apply for. Those who typically pay off their balance every month should go for cards with lucrative rewards programs. Contrarily, cardholders who plan to carry a balance should seek out the card that has the lowest APR.

Discover Earns Highest Customer Satisfaction

Admin — Mon, 29 Nov 2010 00:00:00 GMT

A study conducted by Service Quality Measurement Group, a leading benchmarking firm for North American call centers, found Discover as the top ranking credit card provider for customer call service satisfaction.

Service Quality Measurement Group (SQM) awarded Discover with the highest customer satisfaction for the credit card industry. The results were based on four hundred random telephone surveys to Discover cardmembers within two business days after their calls to the company. The evaluation results were measured on whether the issue was resolved, satisfaction with the service representative, and the cardholders overall experience.

President of consumer banking and operations for Discover, Carlos Minetti said, “our commitment to the finest customer service available is a fundamental reason we have the most loyal cardmembers in our industry." He also added, “We’re honored by SQM’s recognition and remain committed to making the necessary investments to maintain our leadership position in customer service.”

Discover currently employs over ten thousand people. A majority of which are based in call centers in Utah, Delaware, Ohio, and Arizona. Discover also won the Best Performance Leveraging Customer Service Feedback category in the 2010 Call Center Excellence Awards from the International Quality & Productivity Center. In addition, they were honorably mentioned by Information Week, for innovative technology that better assisted customer service representatives during cardholder calls. Discover have also finished first in the Brand Keys Customer Loyalty Engagement Index for the past thirteen years.

SQM Group has conducted studies for employee and customer satisfaction since 1996. The company conducts over one million surveys annually and awards excellence in customer and employee satisfaction. Discover is expected to receive the award at SQM’s annual Summit/Awards Ceremony in Toronto.

Record Low Credit Card Usage Expected this Holiday Season

Admin — Mon, 29 Nov 2010 00:00:00 GMT

An increasing number of American consumers are expected to depend less on credit cards this holiday season. Alternatively, many forecast an increase in debit cards and cash for the majority of their purchases.

According to a new study conducted by the National Retail Federation, Americans are struggling to stay within their newly established budgets for holiday spending. To make it easier to spend within their means, most will use debit cards or cash to regulate their purchases. The study estimates an astonishing forty three percent of consumers plan to use debit cards this holiday season. This is a twenty percent increase from 2005.

The National Retail Federation survey also showed just 27.6 percent of American consumers plan on using credit cards to finance their purchases. This is the lowest figure since 2002. Those who predict to use case this year is estimated at 25.7 percent which is a slight increase from the year before.

In fear of low turnout rates, retailers are offering a great deal of promotions this holiday season. Steep discounts, free shipping, and one-day sales are hoped to attract consumers to shop with them.

Credit Card Mistakes to Avoid During This Holiday Season

Admin — Mon, 29 Nov 2010 00:00:00 GMT

With the coming holiday season, consumers typically will have a great number of things to deal with. This is also the time of the year where there is generally a significant increase in spending. Many consumers also use credit cards to fund these purchases and can be prone to committing several mistakes in credit card usage. Some of these mistakes will be discussed here and should be avoided.

The first thing consumers should avoid is to use their small business credit cards for holiday purchases. Although the newly enacted CARD Act prohibits credit card companies from increasing interest rates on existing balances, the rules only apply for personal credit cards. The same restrictions are not found in business credit cards, therefore interest rates on existing balances can change at any time.

Credit cards transactions used overseas should also be done with precaution. Before embarking on the trip, make sure the credit card you have does not inflict any foreign transaction fees. There are cards available that do not charge foreign transaction fees. It is also advisable to contact your credit card company in regards to your trip so they can expect foreign transactions in the near future. If this is not done, your credit card may be suspended due to suspicious overseas transactions.

A more practical advice in regards to holiday credit card usage is to make purchases within your means. Though this advice may seem obvious, it is surprising to note that many people do not hold to it. Before doing your holiday shopping, one should set a predetermined spending limit and hold to it. Individuals can begin saving up for holiday purchases weeks before, to ease up on credit payment. Credit card payoff calculators are also available for these individuals to estimate the time needed to completely pay for large purchases.

With all that is going on during the holiday season, it is sometimes easy to exceed the maximum allowed credit limit on your credit cards. Consumers should be weary of committing this common mistake. Exceeding the credit limit might entail some unwanted consequences and penalties such as expensive fees and interest rate increases.

Finally, if you expect this holiday shopping spree to involve you carry a balance for at least a few months, make sure you use a credit card with the lowest interest rate. With some researching, one can easily find credit cards with a promotional rate of zero percent for the first twelve months. In addition, if your current cards have increased rates due to late payments, you can call your credit card issuer to reduce the rates after six concurrent months of punctual payments.

Credit Card Charge-offs Increase for Bank of America in October

Admin — Thu, 18 Nov 2010 00:00:00 GMT

In October, Bank of America Corp. reported a slight increase in the number of credit card debt they wrote off as being uncollectible. Though this is the case, the Charlotte, North Carolina based bank also reported a drop in late payments. Bank of America's increase in write off rates is an exception to the broader trend in decreased payment delinquencies among credit card consumers.

In September, Bank of America wrote off 9.98 percent of credit card balances. This figure increased slightly to 10.15 percent in October. Although this is an increase, the rate remains low compared to the peak 13.53 percent rate in December.

Credit card providers usually write off their loans after they are 180 days past due. At this point, the owed balanced is assumed to be uncollectable.

The median charge off rated reached its highest point in the second quarter of this year. According to Federal Reserve statistics, the average write-off rate during that period was 10.66 percent of balances. Prior to the recession, the average rate was only 2.82 percent. Credit card issuer, Capital One Financial Corp, commented that its customers have better control of their debit and has improved payment habits considerably.

The write-off rate is expected to show continued improvements throughout the remainder of the year. In the past two years, consumer credit card balances have shown a continuous decline. Federal Reserve statistics also showed revolving balance for consumer credit is at its lowest point since May 2005.

The trend is attributed to two primary factors. Consumers are growingly more adamant in paying off their credit card balances and using less credit. In addition, credit card issuers are also cutting credit lines to record lows compared to the last three years.

Encouragingly, Bank of America has also reported a decrease in late payments in October. Card payments that are over thirty days late fell from 5.71 percent in September to the current 5.6 percent. This is a good signal the charge-off rates will fall in the near future.

Credit Card Write Offs Continue to fall

Admin — Thu, 18 Nov 2010 00:00:00 GMT

It seems continuingly obvious that American consumers are paying off their credit card debt more diligently and effectively. Recent data from top United Sates card issuers shows the month of October to be no different. Five of the largest credit card companies released figures, which showed fewer consumers being late in their payments and fewer balances being classified as uncollectible. Of the five credit card companies, four of them reported record low levels of late payments and bad debt.

Only Bank of America reported a slight increase for the month (from 9.98 percent in September to 10.15 percent). Even so, the percentage of write offs for the Charlotte, North Carolina, bank is still significantly lower than its peak rate of 13.53 percent in December. The bank also reported a slight fall in late payments from 5.71 percent to 5.6 percent.

According to The Nilson Report, Bank of America is the second largest credit card issuer as far as outstanding balances. Capital One Financial Corp. reported the biggest fall in charge-off rates. Capital One had a write of rate of 8.38 percent the prior month while reporting a 7.26 percent in October. Both Discover Financial Services Inc. and Chase showed slight improvements while rates for American Express Co. remained level during the period.

The drop in charge off rates has been a steady trend throughout the year. Managing director at Fitch Ratings, Mike Dean believes the bad debt situation for credit card issuers is calming. A majority of the bad debt has already been written off leaving them with a better portfolio of accounts still left open. Dean said, "A log of poor performing consumers have been written off."

According to statistics from the Federal Reserve, charge off rates peaked at 10.66 percent in the second quarter. Though the situation seems to be improving, Dean believes we are still quite a bit away from the norm rate of six percent. "We still have a ways to go, "Dean said.

Relief to Consumers from Credit Card Reforms

Admin — Thu, 18 Nov 2010 00:00:00 GMT

A recent two thousand page bill is aimed to tackle subjects ranging from an increase of FDIC insurance, banking reserves, overdraft rules, and many more. The Dodd-Frank Wall Street Reform and Consumer Protection Act is legislation that will affect almost every financial institution that functions in the United States.

One of the more deliberated portions of the law is associated to bank overdraft fees. In 2009 alone, it is estimated that banks collected about thirty seven billion dollars in overdraft fees. The current Dodd-Frank Act will further increase restrictions to overdraft fees that were previously implemented by the Federal Reserve. It is estimated that these added restrictions will cost the banks an additional two billion dollars per year.

Another change from the Dodd-Frank Act requires credit card providers to increase the number of days provided before they are able to raise interest rates. While sustaining the option to pay off on the previous terms, the new law demands fair application of payments as well as reasonable due dates. Several provisions of the act also aims to protect young individuals with credit cards. It restricts issuance fees on fee harvester cards as well as clarifies disclosures the credit card providers must give the consumers. Banks are now required to review rate increases every six months and fees and penalties are greatly restricted. Gift card protections is also part of the bill. Although these changes seems beneficial to consumers in general, credit card companies will most likely find ways to side step the regulations.

Other changes and reforms to the credit card industry come from the Justice Department. In a recent case involving MasterCard and Visa, the Justice Department had brought up charges of anti-competition practices by the major payment processors. Both Visa and Master card settled the case, which will allow merchants to give discounts for customers who use cash. However, American Express is fighting the case, implying that it will only influence the type of cards a consumer would choose to use. It is expected that the suit may take a long time to resolve.

Co-signing for your Child's Credit Card

Admin — Thu, 18 Nov 2010 00:00:00 GMT

With new government regulations, it is getting more and more difficult for minors to obtain a credit card without the assistance of their parents. Parents are often required to co-sign for their child's credit card unless the young individual is able to prove they have adequate income to support the credit card.

It is important for parents to determine if their child is responsible enough to have a credit card. Although the answer is often not clear-cut, it is crucial for parents to make the right decision. By co-signing for their kid, parents are completely responsible for all their financial behaviors. However, allowing the young individual the opportunity to use a credit card may start the path to a long and admirable credit history.

Parents might find it assuring that there are a number of credit cards they can choose for their eighteen year old. Student credit cards typically have lower credit limits so that the individual is less likely to accumulate a large amount of debt. Any increase in credit limit will require the co-singer's approval. If used correctly, student credit cards can be a good starting point for your child to learn about responsible financial practices and behaviors.

There are also credit cards available that shares the parents' credit card account with the child's. This will allow the parents to monitor their kids spending habits. On the other hand, the child can quickly run up their parents credit card bills as well. Though credit limits may be set on the child's card, ultimate financial responsibilities still lies with the parents. Due to this fact, these cards are not a good way for the young individual to learn about responsible money habits.

Pre-paid credit cards are yet another option parents can choose for their children. With pre-paid credit cards, the child can only spend the amount placed in the card. Balances can be reloaded at any time. The disadvantages of using a pre-paid card is that they are often expensive and does very little in helping the young individual build a credit history.

In the end, the ultimate question parents should ask themselves before allowing their child to get a credit card is if the 18 year old is financially responsible enough. If the answer is yes, a credit card can teach the kid a great deal about the importance of money and money management.

Five Secrets to Credit Card Success

Admin — Thu, 18 Nov 2010 00:00:00 GMT

With the onslaught of credit card debt, an increasing number Americans feels unsure about using a credit card. Yet, many still believe that credit card purchases do have its advantages and they are not embarrassed to admit that they use their cards for almost every purchase they make. An individual like Tyler Tervooren, a writer in Portland, Oregon, is one of these individuals. Tyler is able to reap all the benefits associated to credit cards with little or none of the drawbacks. There are five smart ways to use credit cards.

One way to gain the most out of your credit card is to use is as often as possible. Tyler says, "I only carry cash for the few places I frequent that don't accept credit for small purchases (mostly coffee shops). Right now, I have six, but I expect to have several more over the next 6 months.” The increase in usage and balances insures the maximum number of reward points a cardholder can earn.

However, with the increase in balances also comes with an increase in financial responsibility. It is vitally important for cardholders to pay off their balances in full each month to avoid any interest charges. “In the seven years of my credit history, I have never carried a balance or paid a fee of any kind,” Tervooren says.

After enough reward points have been accumulated, it is important to use those points wisely and advantageously. Tevooren commented, "I am very strategic with the cards that I apply for. I use them to build large sums of frequent flyer miles that I use to exchange for otherwise very expensive trips.”

A majority of credit card providers also offers free budget tracking services. These services allow the cardholder to see where their money is going and should be taken advantage of.

The final tip in using your credit cards wisely is the pick the one that is most suited to you. If you follow Tevooren's method in using credit cards, you can basically ignore a cards interest rates and focus on its rewards program instead. Tyler said, " I purchased my entrance to a marathon in South Africa for next summer on a card that offers good frequent flyer rewards and, because it's a travel-related card, it comes with some extra travel insurance provisions above and beyond what you would get with a debit card.”

More Consumer-Friendly Gift Cards for the Year

Admin — Thu, 18 Nov 2010 00:00:00 GMT

For those holiday shoppers who are out of ideas and short on time, gift cards can be an excellent option for them. Previously, consumers had to choose between two type of gift cards that are both with its advantages and drawbacks. Bank issued gift cards can be used almost anywhere but are riddled with fees, exceptions, and expiration dates. Gift cards issued by retailers do have these shortcomings but are limited for purchases within specific stores.

Consumers may be delighted to hear that gift card purchases may be a little bit easier this year due to the Credit Card Accountability, Responsibility and Disclosure (CARD) Act. Certain provisions enacted by the CARD Act are aimed at making gift cards more consumer-friendly. One such reform gives gift cards a minimum of five years expiration. The CARD Act also prohibits card issuers from charging inactivity fees unless the card has been inactive for at least a year.

Although the CARD Act eliminates much of these shortcomings, there are still a few disadvantages you should know before purchasing gift cards. Gift cards supplied by banks or credit card issuers often require a purchase fee from $3.95 to $6.95. These fees are used to pay for services that allow cardholders to check their balances online. On the other hand, none of the retailer supplied gift cards charges any fees for purchases. Even with the CARD Act, gift cards are not completely exempt from penalty fees. Generally, an inactivity fee of $2.50 per month is charged every month the card is not used pass the initial twelve months. Purchasing gift cards can also be a risky proposition. If the associated retailers go out of business, the gift cards are basically useless. Gift cardholders should carefully read the conditions and exclusion associated to their gift cards.

Tips for Holiday Shopping with Credit Cards

Admin — Thu, 18 Nov 2010 00:00:00 GMT

Holiday shopping can be a hectic affair. Often times, through all the frenzy and confusion, it is easy to pay for everything using a credit card. After all, credit cards can give you the immediate joy of the purchase while delaying the pain of payment. In a uninspiring survey conducted by Consumer Reports, a depressing 13.6 million American consumers are still paying for last year’s holiday shopping. The same survey showed credit card users spent an average of ten percent more compared to cash users. Foolish use of credit cards for holiday shopping can lead to added interest payments and overspending.

There are several ways to use your credit cards wisely during holiday shopping. Shoppers should set their spending limit and change shopping habits before getting into the holiday season. If you find you cannot pay off your credit card balance by the end of November, it is very likely you are ill fit to add more debt through the holidays. Consumers should also verify their credit limit before and make sure their debt utilization is under thirty percent. Going beyond this will negatively influence your credit score. Potential shoppers should also start saving money in preparation for the credit card bill in January. It is not recommended that you carry a balance, but if you do make certain the credit card has the lowest rate possible and that all balances are paid within three to six months.

Those who can pay off their balances after the holiday season might actually gain some advantages for using a credit card. A majority of credit card providers may have a partner programs that offers additional bonuses or discounts with certain companies. Rewards points can also be accumulated through your holiday shopping spree. Points can be used to buy gift cards from many retailers. Cash back offers and spending bonuses may be offered during this time. Using a credit card can also provide extended purchase protection or warranties for those holiday gifts.

Catchy Credit Card Transfer Offers

Admin — Thu, 18 Nov 2010 00:00:00 GMT

Consumers continue to find ways to reduce their debt. Zero percent interest transfer offers is one way consumers look toward reducing their interest payments. Greg McBride, senior financial analyst for Bankrate.com said, “Make hay while the sun shines, and strive to get your debt paid off by the time the promotional interest rate expires.”

Although many of these zero balance transfer offers look tempting, consumers looking to participate should study the fine print. In there, they might find these no-interest transfers may not come without a price. Previously, balance transfers were charged a predetermined sum of fifty to seventy-five dollars. This is no longer the case. Current transfer offers typically requires three to five percent of the transferred amount. This may negate the promotional discounts depending on the length of the promotion suggested Jeff Weber, president of Credit Card Depot.

"On shorter balance transfers, fees can eat away at potential savings," Weber said. "If someone is going to do a balance transfer, they should seek an offer that lasts at least 12 months."

Director of Synovate, Anuj Shahani also commented, “Issuers are leveraging their risk of 'old debt' by charging higher balance transfer fees, we were extremely surprised to see a 7 percent balance transfer fee on a Citi offer that we saw in our August collection."

In addition, zero interest offers are becoming increasingly complicated and difficult to comprehend. For example, some furniture and home improvement centers have offered zero percent deals but then charged an interest rate retroactively if the full balance was not paid within a certain date. Vague terminology such as “interest accrues from the date of the transaction” can also be misleading to consumers. Yet others may find it difficult to juggle two or more balance transfers.

As a rule of thumb, it is suggested that cardholders pay off as much of the zero percent balance as possible before the higher rates kicks in. Before taking up any offers, it is vitally important to read the fine print before committing yourself to a balance transfer.

Which is Better for Travel? - Debit or Credit Cards

Admin — Thu, 18 Nov 2010 00:00:00 GMT

Debit cards are a tempting alternative to credit cards. They carry many of the same conveniences, but without the unwanted enticement to indulge in overspending. Because of this, more and more people are choosing debit cards over credit cards.

Although debit cards are a good alternative to credit cards, they might not always be the best choice in certain circumstances. An example of when not to use a debit card is in travel. One reason why this is true is that debit cards offer far less protection if it was lost or stolen. Credit cards have many security features that do not make you liable for a majority of the illegitimate transactions. Another big disadvantage of debit cards is that they are often linked to multiple accounts putting your other finances at risk. Spokesperson for the National Foundation for Credit Counseling, Gail Cunningham said, "If someone gets access to your bank account through your debit or ATM card, they can wipe out your entire account." "And even scarier, if you have that account associated with another account, say your savings account, so you never overdraw your checking account, it can just keep coming out," she added. Finally, credit cards often have purchase protection programs far superior to debit cards. Large purchases made abroad are best done using credit cards.

On the other hand, there are three circumstances that make debit cards ideal. Debit cards are a great option for those who have no access to credit. Individuals with a less than ideal credit history may find it increasingly difficult to apply for a credit card. Debit cards are a viable option for these individuals as well as young consumers starting off in the world. Debit cards also allow consumers to better manage their spending and budgets. Debit cards offer fewer temptations to overspend beyond your means. Finally, debit cards are great for those who simply do not want to carry cash around. Debit cards allow individuals to pull cash from ATMs while not having to carry a large stack of cash around.

Prepaid Credit Cards - Not Just of Teens

Admin — Thu, 18 Nov 2010 00:00:00 GMT

Prepaid credit cards can actually serve several purposes. These cards can in fact help parents teach their children in being financially responsible while helping adults learn a bit about money management as well. Prepaid cards can also allow parents to monitor and control their kids spending and spending habits.

The first thing people should know about prepaid credit cards is that they are not just for teenagers. This type of credit card has several features that are beneficial to adults as well. Prepaid cards allow you to manage your own spending limit therefore preventing an uncontrollable amount of debt. Due to the fact that prepaid cards require you to already have the available finances to fund the card, you are essentially limited to spending only what money you have. By preventing overspending, prepaid cards keep you from getting yourself into unrecoverable debt.

The basic principles to prepaid credit cards are fairly straightforward. Simply load the card with the amount of money you want and have. After the finances are loaded, the prepaid credit card is similar in use as a regular credit card. Every purchase or transaction made will be deducted from the overall balance until it reaches zero dollars. After this has occurred, the card needs to be reloaded or is no longer usable. Prepaid cards are idea for those with poor credit or want to limit their spending.

Prepaid credit cards also come with their drawbacks. The primary disadvantage of using a prepaid credit card is the fees associated with obtaining and using the card. When you initially establish the card, you would have to first pay an activation fee. While some cards deduct a monthly maintenance for using the cards, others charge a fee every time you make a purchase or transaction. Understanding these fees will help you better understand the true cost of using a prepaid card. "Prepaid cards can be very helpful in establishing good money management and budgeting habits. You put an amount on the card and you know your spending limits – that’s a good thing,” said financial advisor Timothy Wyman.

Are Consolidation Loans Beneficial to Consumers?

Admin — Mon, 15 Nov 2010 00:00:00 GMT

In recent times, credit card consolidation loans have increased in popularity. These loans provide a reasonable way for consumers to better manage their credit card obligations in difficult financial situations. The ideal of credit card consolidation loans is nothing new. It was less popular in the past because most cardholders just did not see the need for them when economic circumstances were much more optimistic. Most consumers were happy with and able to make the minimum payments required.

Unfortunately, current economic outlooks are less than perfect. The recession, slowing business and job market has resulted in many individuals losing their jobs or at least a significant portion of their income. This and other negative factors have made it difficult for many homeowners and consumers to repay their credit card debt. Many times, the credit score for these individuals have also taken a hit.

To better control their credit card obligations, both bad credit borrowers and cardholders who are in good financial standing have both sought out credit card consolidation loans and related programs. Many financial experts do not believe credit card consolidation loans are right for everyone.

Although there are many advantages to taking a credit card consolidation loan to better manage credit card debt, these loans usually involves the cardholder pay a larger overall sum to relinquish the debt. For some cardholders, paying down each credit card individually can save them a bit of money as opposed to consolidation loans. If the cardholder is concerned about missing payments, have a poor credit score, or are just overwhelmed by the debt obligation, credit card consolidation loans may provide some relief to that individual.

Cardholders in search of credit card debt consolidation loans should obviously look for ones that are most affordable. But financial experts also advise these individuals to focus a large portion of their finances in repaying these loans. Even with a low interest rate, a high principle amount can be costly over the long haul. Almost all consumers can benefit from quickly reducing their principle amount therefore lowering interest payments.

Consumer Credit Card Debt Decreases Significantly in September

Admin — Mon, 15 Nov 2010 00:00:00 GMT

According to a report released by the Federal Reserve Board, consumers throughout the United States are reducing their revolving credit. These are typically accounts that can be subtracted from or added to and are most usually associated to credit card debt. The report shows that domestic consumers are reducing their debt at an annual rate of approximately twelve percent. Revolving debt in America fell from $822.2 billion in August to $813.9 billion. The fall also assisted the third quarter rate in reducing 8.8 percent.

The report also indicated that commercial banks have been greatly impacted due to the increase in consumer conservatism. Banks struggle with the $8.5 billion decline in revolving credit. In the period from July to August, we saw a slight drop of about $800 million. The end of the third quarter in September saw a more significant drop as the figures moved from $620.4 billion to $611.9 billion. At the end of the second quarter, these institutions managed $623.4 billion in consumer revolving credit.

Conversely, the report also indicated an increase in non-revolving credit in September. Loans associated to cars and homes saw an increase. The figure increased 7.9 percent during the same period.

The recession has changed Americans spending habits greatly. More and more consumers are enthusiastic about cutting down or eliminating their credit card debt.

MasterCard Benefits from Emerging Markets

Admin — Mon, 15 Nov 2010 00:00:00 GMT

Due to overseas volume spikes, MasterCard has reported strong revenues and profits Tuesday. Much of the provided information reflects and increased acceptance of credit cards around the world.

MasterCard reported income of $518 million, which amounts to $3.94 per share. The figure beat the Wall Street estimates of $3.54, on revenue of $1.4 billion that was up 4.7% from a year before. Currently, an approximate 1.6 billion consumers around the world carries a MasterCard or Maestro-branded credit cards.

Global MasterCard transaction volume increased 7.8% to $685 billion. Much of the increase can be accredited to overseas accounts. Volume within the United States actually fell 1.7% to $240 billion. Conversely, Asia Pacific, Middle East, Africa volume grew 23.6% or $157 billion. The most significant volume gains can be found in Latin America. Transaction volume within Latin America grew 19.9% in dollar terms to $55 billion. Transaction volume in Europe was up 6.2% to $207 billion.

Master Card President and Chief Executive Ajay Banga said, “Consumers and businesses around the world continue to recognize the benefits of electronic payments and MasterCard remains at the heart of this evolution."

A majority of the credit card industry saw a strong fall in share prices during May due to increasing government regulations that aimed to lower debit card fees and charges. All the big players, American Express, Visa, and MasterCard felt the impact. The regulations are still being debated today even though it was already signed into law.

MasterCard continues to compete and expand on all aspects. "We are growing our global debit portfolio with new agreements that include Sovereign Bank, Chevy Chase and Delta Airlines in the U.S., Barclaycard in Germany and Qatar Islamic Bank. We are expanding our presence in new markets and channels, reflected in our memorandum of understanding with China Union Pay and an agreement with Singtel, one of the larger mobile operators in Asia. We also completed our acquisition of DataCash which enhances our e-Commerce capabilities," said Banga.

Smartphone App for Credit Card Debt Consolidation

Admin — Mon, 15 Nov 2010 00:00:00 GMT

Consumers and small businesses continue to hunt for useful methods for reducing and managing credit card debt in recent times. As a result, credit card consolidation and relief programs are increasing in popularity. So popular that there is an astonishing number of smartphone applications to better help debt holders track their dept while an inexplicable amount of debt relief organizations attempt to consolidate and lower credit card debt.

An example would be the Credit Card Debt application that is intended to help individuals keep track of their credit lines. Without much of the daily overhead involved with other money management applications, the Credit Card Debt contains a number of features that help individuals better keep track of their finances.

Another application is called the Personal Debt Clock. This unique app displays the time it takes for an individual to pay off their debt in a countdown like fashion. Listing the remaining years, months, days, hours, minutes and seconds allows debt holders to better visualize their financial situation. Every time they make an overpayment, the time will update automatically to reflect the change. Many people will be amazed how much more quickly their debt can be paid off when making overpayments.

Additionally, the Debt Track Pro app automatically calculates payment amounts. This takes the guesswork out of paying off debt and helps the person track their credit cards and other debts using the popular debt snowball method. Using this app is much more attractive compared to using spreadsheets.

For those small business or consumers who need more assistance than a simple smartphone app can provide them, debt relief providers offer free debt analysis. These programs often work directly with creditors to lower credit card debt or interest rates, penalties, and other associated fees.

Fifteen Percent Profit Increase by MasterCard

Admin — Mon, 15 Nov 2010 00:00:00 GMT

The credit and debit card processor, MasterCard, reported record profits for the third quarter. MasterCard beat Wall Street expectations by posting a fifteen percent increase in profits. The progress can be attributed to increased spending and credit card use outside the United States. Revenue for the quarter was reported to being an astounding $1.43 billion.

MasterCard primarily processes credit card transactions but does not directly lend funds to individual cardholders. Instead, the company makes a profit each time a credit or debit card transaction is made. Although the recent economic crisis did not directly influence MasterCard, their revenues did take a hit as consumers began to spend less.

“The numbers were well ahead of expectations” and illustrated “a fundamental turn in their business,” said James T. Tierney Jr., chief investment officer of W.P. Stewart, which owns MasterCard shares.

MasterCard has been targeting new business opportunities in Europe, Asia, and particularly the Latin American market. Credit card use with consumers in Latin America increased significantly in the quarter. Outside the United States, the company reported a thirty-two percent increase in debit card purchase volume growth. This volume increase signifies a growing reliance on cards versus cash.

Businesses and individuals are also spending more on travel using their credit cards overseas. Cross-border volumes increase 15.4 percent compared to the year before.

MasterCard's chief executive, Ajay Banga, was watchful of the economic situation in the United States. As a result, domestic spending by the company decreased somewhat during recent years. Due to Visa's domination of the U.S. market, little opportunities are available for MasterCard.

MasterCard earned $518 million, or $3.94 a share, in the third quarter, compared with $452 million, or $3.45 a share, a year earlier. According to Thomson Reuters, economic analysts had expected $3.54 a share.

Credit Cards For People with a Poor Credit History

Admin — Wed, 10 Nov 2010 00:00:00 GMT

Today, many Americans are finding it increasingly difficult to obtain a credit card. Something which was once very easy to obtain can now be complicated for individuals with poor credit. Sometimes credit cards are a basic necessity which allows people to make online purchase, hotel reservations, and car rentals.

A person may not qualify for a traditional credit card for a number of reasons. An example would be someone who already has too much debt. A poor credit history, missed payments or bankruptcy are also detrimental to anyone looking for a credit card.

For these individuals, a secured credit card may be the solution. Besides serving as a credit card, secured credit cards may also improve one's credit score.

An example of a secured credit card would be the Capital One Secured MasterCard. This card is available to customers without any application or processing fees.

In additional, Capital One Secured card holders can easily look through and keep track of their transactions through online tools. And since all payment transactions are reported to the major credit reporting bureaus monthly, a cardholder can effectively improve their credit score by simply using the card.

The Federal Reserve said in a statement, " One of the most important things you can do to improve your credit score is pay your bills by the due date. In some cases banks will allow customers to set up automatic payments from their bank account.”

The Capital One card has a twenty four dollar annual fee and a variable 19.8% interest rate. “Your refundable security deposit can get you a line up to $3000”, the bank said.

The Capital One card should not be mistaken for a debit or pre-paid card. This is a authentic credit card which even people with a poor credit history can obtain.

Credit Card Defaults Drop Below Ten Percent

Admin — Wed, 10 Nov 2010 00:00:00 GMT

According to Fitch Ratings, the credit card default rate in the United States fell to a thirty month low in September. This is a positive sign as the financial situation begins to improve.

Earlier in the month, the credit card default rate was at 10.36 percent. Fitch's prime credit card chargeoff index dropped to 9.22% which is well below the ten percent mark.

According to Fitch, credit card loss metrics decreased for the third quarter ending September 30. The drop occurred all through the industry regardless of the lackluster unemployment figures.

Fitch managing director Michael Dean commented, "as long as improvement continues in the employment situation, particularly on the new jobless claims front, we could foresee further improvements in chargeoffs." Dean also suggested that defaults are still elevated on a historical standpoint.

Fitch thinks credit trends will be more deeply connected with short term unemployment figures. An example would be unemployment insurances claims which have been falling in recent months.

As the American recession is slowly diminishing and the economy showing signs of a comeback, associated data has also shown a decline on credit card delinquencies in the past year. Driven by tighter underwriting , optimistic trends in delinquency rates, and a progressive change in issuer portfolios, a general improvement in issuer credit card loss metrics can be observed.

Delinquencies of thirty days or more has improved throughout the third quarter, beating 2005-2009 portfolio averages.

Double Rebate Holiday Offers from Discover

Admin — Wed, 10 Nov 2010 00:00:00 GMT

Discover Card customers should be expecting some additional holiday bonus offers this year. Discover More, Motiva, and OpenRoad card members can expect their online purchase cash back rewards to double to two percent this holiday season.

The promotional period applies to purchases made from mid November to the end of December. This time frame would be perfect for shoppers looking to take advantage of Black Friday promotions. Similar to their limited five percent cash back offers, Discover Card members would have to sign up online for the promotion. In addition, the offer is limited to one thousand dollars in purchases only.

The promotional rate amounts to a maximum ten dollars in additional rebate dollars. Though the amount is not too significant, having a little bit of extra cash on hand is always nice.

Bill Hardekopf, CEO of LowCards.com says, "we are seeing more and more and more cash-back incentives for cardholders." Hardekopf also added that promotions for new customers with good credit card even more appealing. The Discover More offer gives new customers one hundred dollars if they spending five hundred dollars with in the first three months of using the card. Chase Freedom offers something similar with one hundred dollars for the first eight hundred dollars charged in the first three months.

CEO of NerdWallet, Tim Chen says, "you're seeing a lot of very good rewards cards rolling out right now." "One of the easiest way to boost revenues is [for credit-card companies] to get you to swing from using it as a secondary card to a primary card, especially in the holiday season." Tim also adds that Discover is not making any profit from transactions during the two percent rebate promotional period. They will primarily make money on interest charges.

Additional Incentives for Discover Cardholders

Admin — Wed, 10 Nov 2010 00:00:00 GMT

Throughout 2010, Discover Card has awarded its Discover Card Cashback members with a five percent cashback bonus in a range of categories. These rewards are expected to continue throughout November and December.

The November and December five percent cash back rewards will affect purchases made in department stores, apparel stores, and restaurants as reported by TheNewsofToday.com. The five percent bonus is on top of the already available one percent bonuses offered on transactions through any other type of stores.

Discover also gives their cardholders an added bonus for the month of November. Members of the Discover Card Cashback program who is a part of the Discover Every Day Giveaway will also receive four additional daily prize entries for each purchase made at a drug or grocery store. Each day, the prize drawing features seventy five prizes for up to five hundred dollars in Discover gift cards. In addition, the Discover Every Day Giveaway will have a grand prize of one million dollar in 2010.

Unlimited cashback bonuses and offers up to twenty percent cashback at their ShopDiscover store is also offered by the Discover Card.

How to Avoid Credit Card Fraud

Admin — Wed, 10 Nov 2010 00:00:00 GMT

Millions of people are victims of credit card fraud each year. In most instances, credit cards are taken or exchanged from an individual's wallets, automobile, or mailbox. The credit card numbers are often compromised as well. There are many things a consumer can practice to help minimize their chances of being victims of credit card fraud.

The first single most important thing to do to minimize credit card fraud is to keep all your credit cards, associated paperwork, and identification safe. Most cards and identifications can be kept at home if you do not intend to use them. Having these items in a safe location will greatly minimize the chance of you losing them.

Documents with your information on them and is of no further use should also be destroyed. Dated credit card or bank account statements are good examples of documents that should be dealt with after they are of no use. Just throwing them away may sometimes be not enough. Whenever possible, individuals should shred them for added safety.

There are several precautionary measures you can practice to reduce your likelihood of being a victim of credit card fraud. One should never sign blank credit card receipts, such as ones left to you at restaurants. Additionally, consumers should never use a credit card with any transactions where you can't see the cashier.

Credit card fraud risk can also be improved by simply being careful in giving out your account information. Credit card providers often require verification questions in order for you to be able to access vital information about your account. It is important for card holders to use these security features to better protect them from individuals looking to steal their personal information.

Added security can be accomplished by frequently changing your password and PIN. When assigning a password or PIN, it is advisable to use letter and number combinations that are not too obvious. Birthdays, anniversary dates, or pen names are too often used and easily compromised.

Finally, card holders should constantly monitor their credit card accounts. Discrepancies and suspicious activities should be reported immediately to the card provider.

Latest Global Credit Card Security Standards Released

Admin — Mon, 08 Nov 2010 00:00:00 GMT

A majority of the new supplements to the payment card industry data security standards makes current requirements more explicit. By doing so, these new standards should make the future generation of credit cards much safer for consumers.
A report from the PCI Security Standards Council indicating the latest payment card industry data security standards did not include any new prerequisites. The report primarily aimed to clarify the basic measures of the past. Some changes include an increased focus on the managing and storing of credit card data. The report also included information on an organizations ability to more effectively prioritize vulnerabilities.
General Manager of the council, Bob Russo said, “the nature of the changes is a testament to the strength and growing global maturity of the standards as a framework for securing cardholder data."
According to the report, over fifteen hundred people from six hundred organizations took part in the council’s yearly meeting to help solidify the Version 2.0 requirements. The new rules for PCI DSS and Payment Application Data Security Standards will take effect January 1, 2011.
As attacks on lender systems have become more frequent in recent months, many companies have showed a growing concern over credit card security.

Rewards Credit Cards May Not Be for Everyone

Admin — Mon, 08 Nov 2010 00:00:00 GMT

Consumers should not associate using a credit card to playing an arcade game. Although credit card companies might lead you to believe so, the accumulation of points is not the primary goal of a credit card. In reality, rewards credit cards are not fit for every consumer.
Credit cards should be used to accomplish three principle functions. They should be used to improve credit, lower the cost of debt, or maximizing the value of rewards. Although many might believe they can accomplish all three goals at once, it is almost always more efficient to concentrate on one function at a time and choose the specific card accordingly.
If you don’t have an excellent credit score, your primary focus in using a credit card is to rebuild credit and pay off balances. Mounting up points for trips and free electronics should be the last of your worries. Similarly, if you carry a credit card balance, using a card with low interest rates may be more beneficial than using one with high rewards points which often involves higher interest rates. Fundamentally, rewards credit cards should only be used by those with excellent credit and can pay off their complete balances every month.
Even for consumers who are qualified to use rewards credit cards lucratively, there are still a number of different types of rewards card they should consider. Some individuals might find travel rewards cards beneficial while others may find cash-back cards more suitable to their lifestyle.
In the end, what utility you require from your credit card dictates the card most suitable and lucrative to each individual. Secured credit cards may help you rebuild credit, while low interest rate cards might help you easily pay off standing balances more quickly. Good credit consumers can choose between travel rewards cards or cash-back cards depending on their spending habits. Just understand that rewards credit cards are not for everyone.

Credit Card Regulations Continues with Government

Admin — Mon, 08 Nov 2010 00:00:00 GMT

In the previous year, our government enacted revolutionary changes to the credit card industry. These regulations provided consumers with a certain degree of protection while limiting the practices of credit card issuers.
These changes were brought to us through the Credit Card Accountability, Responsibility and Disclosure (CARD) Act in August of 2009. The piece of legislation included such changes as requiring issuers to give cardholders forty five days to opt out of an account if specific changes were implemented to it. The CARD act also required credit card companies to mail out billing statements earlier.
In February, the largest number of changes took into affect via the CARD Act. Some of these changes included limitations on young consumers’ ability to obtain a credit card. Individuals under the age of twenty one will now have to prove their income capabilities or have a co-signer for their credit card.
Other changes mandate a change in format for credit card billing statements. Statements must now clearly indicate the amount of interest charged and the time it would take to pay off a balance by simply paying the minimum required payment.
The CARD Act also limits credit card issuers’ ability to increase interest rates. Credit card companies can no longer increase interest rates in the first year the account is activated and promotional introductory rates must last a minimum of six months. Even if interest rates are increased after the first year, the new rate can only be applied to future purchases.
"If your credit card company requires you to pay fees (such as an annual fee or application fee), those fees cannot total more than 25 percent of the initial credit limit," the Federal Reserve Board's website said. "For example, if your initial credit limit is $500, the fees for the first year cannot be more than $125."
Even with the many changes already in effect, October may bring even more reforms. Application fees will be limited to twenty five percent of the total available credit of the card and rules applying to promotional rates must also apply to reduced rate offers as well.

Credit Cards and When You Have Crossed the Line

Admin — Mon, 08 Nov 2010 00:00:00 GMT

Credit cards can be a mixed blessing. They can make life much easier or put you into financial ruins. Sometimes knowing if you have crossed the line in regards to credit card use is not so apparent. Some of the tell tale signs will be discussed here.
Credit cards should be used selectively. They should not be used for impulse purchases, purchases made when you know you are close to your card limit, and purchases to simply increase reward points. CreditCards.com has written an article with fifteen situations to which a credit card may not be the idea answer. Although fifteen might seem like a large number, there should be infinitely more reasons and situations why one should not use a credit card.
On the contrary, an alternate article by wisebread.com describes situations when using a credit card is appropriate. Ironically, the article was written in 2007, before the economic meltdown. This article may be a good example of how easy credit can be taken for granted.
The most important thing to understand when using credit cards is that the cardholder is essentially taking out a loan every time a purchase is made. Try asking yourself if it is really necessary to take out a loan on small purchases such as gasoline, groceries, or coffee. In most instances, the answer should be no. If this is indeed the case, it may be advisable to use your cash for small purchases instead of the credit card.
The Credit Union Nation Association offers a set of packaged materials worth looking into. The packets are essentially seminars in a box and provide valuable training information for consumers.   Besides important information in regards to credit card use, the material also includes advice on budgeting, organizing financial records, protecting oneself against identity theft, and even home buying tips. These kits are available for $220 and will include enough printed materials for one hundred attendees.