Credit Cards » Credit Card News » 4 Tips To Keep Your Credit Card In Control
Date June 4, 2009

4 Tips To Keep Your Credit Card In Control

Category: Credit Repair, credit card news

If you’ve followed the news, you’ll know that the credit card industry is in a state of turmoil nowadays. Defaults are up, debts are not falling and the credit card bill just got passed. The credit card industry, in a preemptive attempt to stem their foreseen profit losses are raising interest rates and cutting credit. You’d think that keeping your credit score good and having zero debt would save you from these. You’d be wrong.

4 Tips To Keep Your Credit Card In ControlStill, the whole doom and gloom credit scenario does not mean that you should just stay home and not spend on anything, even the necessities. There is still some good things left, credit-wise and, as long as you are smart and careful, you can make the best out of them. Try out these tips to see how you can do that.

Pay Off Your Debts

It may seem common sense to you but this is actually what started this whole credit card problem in the first place. People were charging stuff they did not pay for immediately, or could not. It also follows that, whatever you charge on your credit card, make sure you can pay it off when the monthly bill comes. Also, be careful of the “minimum amount due”. It is a clever ploy which does not pay off your debts but only the interests.

Maximize Those 0% rates

If you just got a card with a 0% introductory offer, maximize its use but be sure you are able to pay off the monthly bills. It is very important that you always pay off your monthly bills because these 0% interest rate offers will usually jump to astronomical rates the moment you miss one payment. Don’t count on automatic payments too much, either. If you want to use automatic payments, make sure that your bill is paid off well before the due date.

Be Careful Of Your Credit Limits

Credit limits used to be a big thing way back when. Nowadays, you can charge beyond your credit limits with ease. Ostensibly, credit card companies allow this to save you from getting humiliated when your credit card is denied at the counter. However, the penalty fee that you will be paying if you go over your credit limits would make you prefer getting shamed instead. Credit card companies are known to charge high penalty fees for over the limit purchases. With the credit crunch on, that’s going to get higher.

Risk Based Pricing

If you are applying for a credit card or a loan because you like the interest rates that they are advertising, be careful. That may not be the rates that you will get. Credit companies call it risk based pricing. Basically, they adjust their interest rates based on how “risky” a borrower you are.

Tags: , , , , ,
Date May 23, 2009

Credit Repair or Credit Scam?

Category: Credit Repair, credit card news

As the economic crisis continues, people are getting more and more desperate on where to turn to for financial help. Out of this desperation, people sometimes grab on to the solution that offers the quickest, most accessible solution. One of these are debt consolidation companies, also known as credit repair companies.

Credit Repair or Credit ScamCredit repair companies offer some of the most enticing deals for credit repair nowadays. No wonder that, at a time when most companies are facing economic problems, credit repair companies are growing. As more and more people face debt, credit repair businesses become more and more lucrative. Unfortunately, credit repair businesses often have more bark than bite.

Credit repair companies are becoming popular in the news nowadays as more and more people come forward to complain about their practices. Credit experts are also seeing how these companies are taking advantage of people’s desperation to get out of debt, often misleading them with empty promises and ultimately doing nothing to make their debt situation better. In fact, in some cases, these companies may make them worse.

Jim David from the Better Business Bureau had this to say, “There is a lot of anxiety out there. We are in tough economic times; nobody knows what’s around the corner. There’s a lot of people who are very desperate and vulnerable; that is being acted upon by some of these schemers”.

Determining the scam from the legitimate business is the key for consumers, as there are still companies that try to provide the right service for their customers. The smartest thing for consumers to do is to watch out for some of the warning signs for scam credit repair companies.

“They want to get your money off the bat. They have a large upfront fee, they’ll have a large monthly fee,” David points out. However, this is not a full proof indicator, as some companies promise to be non-profit, only to turn out to be scams in the end. Consumers should get everything in writing, David advises.

David also warns consumers that some credit repair promises are actually impossible. For instance, they do not have the power to take out any negative information out of a consumer’s credit report. In point of fact, the consumer can do this for himself, free of charge. He only has to contact his creditor or the credit bureau and request for the removal of the information.

According to David, if consumers really have to deal with credit repair companies, they need to be aware that dealing with these companies will most likely have a negative impact on their credit score. They should also make sure that their creditors acknowledge whatever agreements they enter into.

Tags: , , , , ,
Date May 19, 2009

Credit Card Debt: Where the Problem Lies

Category: Credit Repair, credit card news

Credit Card Debt: Where the Problem LiesThe credit bill is going to get passed soon enough, but is it really enough to get Americans off debt in the long term? Some say that legislation will take care of that by limiting and reigning in the credit card industry, which seems to have been running wild the last few years. Others argue that the problem is actually the American people themselves, specifically their spending habits.

So, where does the problem lie? If you really take the time to look at it, you’ll see that the problem is shared all around and every part of the problem, from the creditors to the credit cardholders, holds the solution to the entire problem.

Judging by the recent public outcry over the unfair and downright deceitful practices of credit card companies, it definitely seems that credit card issuers are the root cause of the problem. Their sudden rate hikes and imposition of high transaction fees to their customers without any prior notice and without even taking into account their customer’s credit history is certainly right there with outright highway robbery.

Other questionable practices perpetrated by the credit industry include allowing overdraws so that they can make money off the interest or the overdraw fees, extending credit to people who are not in a stable enough financial situation to pay off their credits and, perhaps the sneakiest of all, increasing interest rates if the customer pays late to an unrelated credit card company or even a utility company.

The credit card bill, which will soon come out of congress, should stop these practices and some others. However, there is some degree of truth over justifications of credit industry insiders who say that the credit card industry never forced their customers to sign up to their programs or to charge excessively on their credit cards.

It is very true, cardholders were never forced to charge expensive dinners, luxury gadgets, and unnecessary expenses without considering if they could pay for it or not. The mantra for the spending habits of America seems to have been “spend, spend, and spend” for the past few years. It also didn’t help that the credit card industry encouraged this habit by lowering their credit card application requirements, offering deceptive packages and generally giving consumers enough leeway to bury themselves in debt for the next ten years or more.

Although the credit card industry has a lot to answer for, clearly the spending habits of the American consumer need to change as well. Fortunately, the economic crisis, the employment slump and the oppressive actions of the credit industry have put such a strain on every American consumer’s finances that they are doing just that.

Tags: , , , , ,
Date May 11, 2009

Say No To Bankruptcy

Category: Credit Card Management, Credit Repair, Credit Score, Debt Consolidation

701012_68282226According to industry experts, credit card debt is one of the leading financial problems that many Americans are facing today. The economic crisis that began last year has resulted in massive unemployment, rising interest rates and an ongoing economic instability which the U.S. government is still trying to contain. All of these things mean only one thing to the common American, they are now struggling to make ends meet and every “cash drain” has to be plugged. One of the biggest drain that most Americans have to deal with is credit card debt.

To put it bluntly, there is really only two ways that you can deal with credit card debt. You can pay it all up or you can declare bankruptcy. Of the two, the easiest way out would be declaring bankruptcy. It is also the most ruinous. True, declaring bankruptcy can lower your payment rates. It might even absolve you of it entirely. However, in the long run, it can hurt more than it can help. For instance, if you declare bankruptcy, you’ve tarnished your credit record permanently. So, every time you try to take out a loan, credit card companies will check your records and, more likely than not, you will get turned down.

Obviously, the best way to deal with credit card debt is to pay it. Of course, that is easier said than done, especially with the current economy. Dealing with it on your own can be daunting and confusing, to say the least. With the amount of fine print that credit companies put in their agreement forms, you can go blind just looking for how much your monthly interest rates should be. A good idea for those with credit card debt would be to go for credit counseling.

The people in credit counseling are people who have dedicated eight hours a day, five days a week to the task that everyone else is relegating to a few minutes every time the budget comes up, understanding the credit industry. Thus, when you go to them for help regarding your credit card debt, you can be sure that they know several solutions that can ease your credit card burden. Of course they won’t make your debt disappear. They will just make it easier to handle so that you won’t be losing three quarters of your monthly take home pay to credit card debt payments.

Credit counseling agencies will investigate every minute detail of your finances to find out how to help you. They will be looking into your credit history and it really helps if you have a good one. They will consider your monthly take home pay and compare it against your monthly debt payments. Depending on how you rate, they can negotiate a lower monthly rate for you with your credit company.

Tags: , , ,
Date May 8, 2009

Pull Yourself Out Of Debt

Category: Credit Card Management, Credit Repair, Debt Consolidation

With rising credit interest rates and ever increasing credit fees, everyone desperately wants to get out and stay out of debt. Unfortunately, more than it has ever been before, this is something that is much easier said than done. Still, there is hope. With a bit of belt-tightening, some smart spending decisions and keeping an eye on the details, it is possible for you to live debt free, even with the current economic climate.

Pull Yourself Out Of DebtAccording to industry insiders, the average American family owns at least one credit card. Credit cards are very convenient when it comes to payment. They can even be lifesavers in situations where there is no cash immediately available. However, credit cards can be deceptively convenient when it comes to purchases. So much so that most credit card owners find themselves surprised by the amount that they have to pay after they’ve gone through a spending spree.
Sooner than they think, they find themselves deep in debt.

According to experts, if a person’s take home pay loses 20% to nonhousing debt, then he is overextended. Another indicator of overextension is when 30% of a person’s monthly income go directly to paying the rent or the house mortgage. Other indicators include not knowing the total amount of debt, paying only the minimum balance in credit card bills and borrowing in order to pay debts.

If you find out that you are overextended and unable to keep up with your debt payments, don’t panic. You can still get yourself out of debt, though it will require some effort.

The first step to get out of debt is to keep track of where the money is going. This is not as trivial as it sounds. Little purchases, bank fees and other small amounts that most people take for
granted often add up to a considerable amount at the end of the month. It is best if you keep a written record of the month’s expenses. This makes it easier to track where the month’s budget is going.

By keeping track of your expenses, it is then easier for you to find out where the money is going and whether some of it can be diverted to payoff your debts. This often mean that you will have to get creative. For instance, you might consider bringing lunch instead of buying lunch from the cafeteria or your favorite fastfood place. The main goal is to minimize your monthly spending. This way, you can free up money to pay off debts.

When paying of your debts, make sure to prioritize debts with higher interest rates. If at all possible, transfer your high rate debts to your low rate credit cards. Look for low rate cards and transfer to them. Try to minimize using your credit cards and, if you really have to, comparison shop. Also, limit your credit card purchases to necessities as much as possible.

Tags: , , , ,
Date May 3, 2009

Number of People Sued by Credit Card Companies Increasing: Here’s What to Do If You Are Sued

Category: Bad Credit, Credit Card Management, Credit Repair, Debt Consolidation, Money Management, economy

lawsuitIt’s difficult to track exactly how many debt collection cases for defaulted credit card debt are filed because they are filed along with all civil cases through the prothonotary’s office. Capital One, a credit card company known for lending money to individuals with less than perfect credit histories, have filed a large number of cases. In Lancaster, Pennsylvania, of 255 cases filed during the first three weeks of April, Capital One filed 45% of them (a total of 114). Neither the attorney representing most Capital One lawsuits in court, Paul Klemm, nor Capital One representatives returned phone calls from reporters regarding this issue.

Attorneys who have counseled clients facing bankruptcy or credit card defaults have stated that more credit card companies than ever before are attempting to recoup some of their financial losses by taking card holders to court. In previous years, credit card companies would sell off their debts (for pennies on the dollar) to debt collectors and collection companies. Lawsuits, if filed, would be filed by debt collectors – not the credit card companies themselves. Now that the economy has nosedived and credit card companies are having trouble finding buyers for their unpaid debts, they are becoming more aggressive about collecting on defaulted accounts themselves. A successful lawsuit means a greater recovery rate for the credit card company.

The credit card industry states that the changes made by the U.S. House of Representatives on Thursday, April 30th, would cost the industry more than $10 billion per year in interest payments. The figure was obtained through a study by the law firm Morrison & Foerster. Changes to the credit card laws include restriction of interest rate increases and prevention of credit cards given to anyone under the age of 18.

If a creditor takes you to court, here is what you can do to build your case:

Prepare a Budget: list all of your monthly expenses and obligations from utility statements, invoices, receipts, and billing statements and show proof of your monthly income.

Document Medical Conditions: if a medical condition has made it difficult for you to keep up with your payments, or medical expenses are eating up all of your income, get documentation of your medical condition from your doctor(s).

Respond to the Court By the Due Date: do not ignore the situation as it will not go away. If you don’t respond to the court prior to the date listed on your letter, the creditor will automatically win due to your inaction. There are sample response letters you can use online, or call and talk to the court clerk for assistance in how to respond to the court regarding your credit card suit.

Document Changes: many people are unemployed or laid off at this time, which makes it difficult or impossible to pay your bills on time. Get documentation if this has happened to you. Other life changes can also contribute to the inability to pay for bills, from having a baby, becoming depressed, medical conditions, etc. If they can be quantified by doctors or employers, these are all viable reasons and should be mentioned in court.

Document What You’re Doing: If you’ve joined a debt relief solution, such as a debt management company or a credit counseling service, obtain proof from the company. This shows you aren’t just sitting back and skipping out on your bills and that you’re making an attempt to remedy the problem.

Tags: ,
Date May 1, 2009

Common Sense Your Best Defense Against Identify Theft

Category: Credit Card Management, Credit Repair, Credit Score, Money Management, People and Credit, credit card news

It used to be that identity theft meant an unauthorized purchase on a credit card. But criminals have advanced identity-theftalongside technology and suddenly identity theft can involve a stolen Social Security number used for filing false medical claims or applying for mortgages. When you swipe your card at the ATM, gas pump, or in the RedBox for your next video rental, how do you know there isn’t a fake front added to the swiper – capturing your credit card number and pin?

You’ll know when you start getting the bills and experiencing the problems associated with identity theft. The Federal Trade Commission estimates nine million Americans are victims to identity theft annually, but the most extreme identity fraud cases are rare.

For the most part, fixing a case of identity theft will involve closing one credit card account or freezing your credit if you notice a problem. If you should become the victim of extreme identity theft – where a person becomes “you” in order to open new lines of credit or pay for their medical expenses – you can experience a very lengthy clean up process to repair your credit history. It can take months, sometimes even years, to repair credit histories and scores after such fraud takes place.

Security measures are constantly being improved for your credit card accounts, bank accounts and health care records – but you can’t rely on them to fully protect you from all fraud. You need to take some common sense steps to prevent identity theft.

Preventing the problem is easier than treating the problem. Review your monthly statements regularly from all of your financial accounts. If you see anything that looks suspicious, take action immediately. Most of the time you can stop identity theft in it’s tracks if you take action as soon as you see an unauthorized transaction – but if you aren’t reviewing your financial information monthly or even more often – chances are you’ll miss it until it becomes a huge problem.

Look at your credit reports to make sure there is no errors or omissions on your report. Follow steps to fixing any errors.

Shred bank statements and medical records before disposing to prevent garbage pickers from gaining access from your important information. Don’t carry your social security card in your wallet. Change online passwords frequently and don’t make them easy to guess.

Tags: , , ,