Reverse mortgages were popular with elderly citizens during the initial effects of the financial crisis. While we as a nation were just beginning to realize our economy was far from stable, people 62-years-old and up who were feeling the strain on their finances but owned their homes outright began setting up reverse mortgages that gave them income to live on. This saved some of the equity of their homes that quickly slipped away when the housing market crisis occurred.

Basically, how a reverse mortgage works is a bank makes you a loan by recording a mortgage against it. During the time you are living in your home, you can choose to receive a lump sum of cash, a credit line, regularly monthly cash advances, or any combination of these options. No repayments of this loan are made during the life of the loan, which is why they are so attractive to people who have a lot of money tied up in their homes but not enough money in their bank accounts. Instead, this loan is paid back to the bank, along with fees that include closing costs, insurance costs, and other fees tacked on by the bank, after your time of death, when your home is no longer your primary residence, when an heir takes over the property, or when your home is sold.

On its face, a reverse mortgage seems like a great resource available to people who are ready for retirement but need to ensure that they will have the income they need to live comfortably. However, when you delve deeper into the pros and cons of reverse mortgages, you’ll find that many people are against this option because of the amount of fees and other costs that come along with the initial loan you receive, and the amount of time this loan accrues those fees.

If your plan is to set up a reverse mortgage and live on this income until your dying day, when afterwards, your house will be sold to pay the bank back, you may not have much else to worry about. However, if you choose a reverse mortgage at 62-years-old, the minimum age requirement for this option, this loan will likely have fees and charges added onto it for the next 20 years or longer. After you move out of your home or after you are deceased, if your child, grandchild, or another heir chooses to take over this property, they will likely owe the bank more than your home was worth when you chose to set up the reverse mortgage. That is one expensive loan that must be paid back to the bank one way or another.

As with any financial decision that will have a tremendous impact on the rest of your life and the lives of those closest to you, speaking with a variety of banks and experts is always the best thing you can do. Get the facts on reverse mortgages and weigh your options for retirement opportunities that can help supplement your income.

Photo by IronRodArt – Royce Bair

Related Posts:

• None yet, check back soon!

In its 2011 report to Congress, the FTC received more than 140,000 consumer complaints regarding unfair, deceptive and abusive debt collectors.

According to American Banker, the Office of the Comptroller of the Currency is currently investigating JP Morgan Chase for improper credit card collections. The publication cites current and former employees who report that Chase “took procedural shortcuts and used faulty account records in suing tens of thousands of delinquent credit card borrowers for at least two years.” Chase employees report that the Chase card litigation involved unreliable external attorneys as well as poor office procedures. Perhaps as a result of the investigation, Chase stopped suing delinquent borrowers in 2011.

The publication further states that company documents, court filings, and interviews with seven current and former employees reveal “Chase’s credit card litigation operation was allegedly plagued by unreliable external attorneys, management’s disregard for accuracy, and patchy technology.” It also reports that the bank’s computer systems frequently disagreed about how much debtors actually owed.

Collection of bad debt has grown into a billion dollar industry. In 2000, Chase recouped $130 million a year from bad consumer debt of all kinds. By 2009, Chase recovered over $1.2 billion on credit cards alone, according to the American Banker. Litigation became a profitable way to handle bad debt as the bank would charge off more than $20 billion in credit card accounts in 2010 and 2011.

“Debt collection is complicated, and some collectors may push the boundaries of the regulations and law to get money out of you,” says Bill Hardekopf, CEO of LowCards.com. “The best way to protect yourself is to be familiar with the laws, and know exactly what you owe and to whom. If the collector is doing something that is illegal, report that company to the FTC.”

Collections and Litigation of Credit Card Debt

Your credit card minimum payment is due at least 21 days after you receive your bill. If the minimum payment is late, it will be reported to the credit bureaus (if this is your first time, and you are a good customer, they may not report you until the account is 60 days late).

If you don’t make your minimum payment in 60 days, your account is turned over to the collections department and the delinquency is reported on your credit report. If you can’t make your minimum payment now or over the next few months, this is the time to call your credit card issuer to try to work out a payment plan.

If your account is 90 days past due, this is serious delinquency and you will receive insistent calls and letters from your creditor. Late fees and interest payments will accumulate and your credit card issuer will probably shut down your credit card account.

Beyond this point, your account will be charged-off by your credit card issuer and turned over to a collections agency or a third-party debt collector. The debt collector will contact you through phone calls, emails, and letters. The Fair Debt Collections Practices Act provides guidelines for contact from debt collectors. Before you make a payment, verify the amount and the creditor. You may be better off negotiating a settlement with the credit card issuer. The third party collector can even sell your debt to another collector.

If this doesn’t work, the third party collector can sue you and take you to court. They will send you a summons to appear in court. Do not ignore this because if you do not show up, it is an automatic win for the collector. If the debt collector or creditor wins the case and receives a judgment, it can seize assets or garnish wages to pay off the debt. The judge could also create a payment plan.

There is a statute of limitations to sue for credit card debt, and if the date is passed, you can have the case dismissed. This limit is set by the states and varies from three to ten years. It is up to you to know and prove this. The debt collector can still attempt to collect on debts.

Information about a delinquent account remains on your credit report for seven years from the date you first missed a payment.

Photo by businessheroes

Related Posts:

• None yet, check back soon!

According to CNBC, there is an antitrust suit between five million retailers and Visa, MasterCard, and 13 large banks, including Citi, Bank of America, Chase, Capital One, U.S. Bancorp, and Wells Fargo. Retailers claim that banks and the payment systems have unfairly worked together to increase the amount of the interchange fee retailers pay on credit card transactions.

The amount that each retailer pays as a swipe fee varies widely but the industry average is approximately 2%. This antitrust suit could cut that figure by three-quarters down to 0.5%. That would be one more devastating revenue blow to the banks as well as Visa and MasterCard, leading to billions of dollars in lost income.

Last year, the Durbin Amendment went into effect on October 1, cutting the interchange fee on debit card transactions from an average of 44 cents to no more than 21 cents (plus 0.05% of the transaction, with the possibility of an additional cent if banks comply with fraud prevention procedures). Banks tried to make up for this lost revenue by implementing a monthly debit card fee which led to consumer outrage. Banks eventually rescinded this monthly fee.

If the retailers win this antitrust suit, it could have a significant impact on consumers:

• Banks will lose billions of dollars at a time when they have already suffered significant cutbacks in revenue. Whenever banks lose revenue in one area, they try to make up for it in another area and that always comes at the expense of the consumer. An increase in existing fees, the introduction of new fees, and an increase in the credit card interest rates are changes that could be pushed by banks.
• A significant decrease in credit card reward programs. The lucrative cash back and airline mile rewards will likely decline. Most banks eliminated debit card rewards when the Durbin Amendment passed. The same could happen with credit card programs if retailers win this suit.
• A likely decrease in attractive balance transfer offers. Currently, credit card issuers are offering 0% interest rates for extended periods of time in order to lure customers from their competitors. The Citi Platinum Select card offers 0% for 21 months; the Discover More card offers 0% for 18 months; and the Slate from Chase card offers 0% for 12 months with no balance transfer fee. If retailers win this antitrust suit, look for credit card issuers to scale back these balance transfer offers.
• On the positive side, a possible decrease in prices at store level. Retailers claimed the passage of the Durbin Amendment could lead to a decrease in prices since they would no longer have to pay high swipe fees on debit card transactions. It is difficult to see if this actually took place. However, retailers may face more pressure from consumer groups to cut prices if the interchange fee is also slashed on credit card purchases.

Photo by Helcim

Related Posts:

• None yet, check back soon!

Orman is the latest celebrity to jump into the prepaid card market. As a well-known financial adviser with a strong following, she just may have the clout to capture a significant portion of the market.

Prepaid cards have historically targeted consumers with poor credit who could not qualify for a standard credit card. These cards were easy to get, but were loaded with exorbitant fees. That began to change last year when American Express introduced its own prepaid card with fewer fees.

There are some nice advantages to Orman’s Approved Card. It has fewer fees than most prepaid cards: there are no loading fees, no fee to transfer money to another card, and no fee to make electronic bill payments. The card comes with free identity theft protection and also gives the cardholder unlimited credit reports and scores from TransUnion, one of the three credit reporting agencies.

As with any card, consumers need to read the fine print to be aware of the fees that will be charged.

The Approved Card costs $3 to purchase and then has a monthly fee after the first month of $3. ATM withdrawals are free each month as long as they are made from the Allpoint network and you make a direct deposit of at least $20 each month. Otherwise, the ATM withdrawals will cost $2 per transaction.

If you get cash back when making a purchase at a retail store, that will cost you $2.

Your first call each month to a customer service representative will be free, but subsequent calls will be $2.

The opportunity to receive unlimited credit reports and scores from TransUnion can be beneficial for consumers, especially those trying to build their credit. However, the score that will be available will be the TransUnion score, not the FICO score that most banks use when deciding a consumer’s credit worthiness. Orman says TransUnion plans to collect Approved Card user data to determine if it should include prepaid card data on its credit reports in the future.

“A debit card linked to your checking account is much better than a prepaid card for most consumers. A debit card will not have the monthly or usage fees that are common with prepaid cards, even this new one from Suze Orman,” says Bill Hardekopf, CEO of LowCards.com. “But for people who don’t have a bank account, or may have some credit problems, her card may be a good alternative.”

Related Posts:

• None yet, check back soon!

The National Retail Federation predicts that 80% of people have purchased gift cards this holiday season and shoppers will spend an average of $43.23 per card. Total holiday spending on gift cards in 2011 reached $27.8 billion. That number grows each year because gift cards are the easiest present to give, saving time and shopping stress for the giver.

Surprisingly, it is also a present that goes unused. Last year, 113 million Americans received gift cards during the holidays, but at the start of the 2011 holiday shopping season, a quarter of recipients still had an unused gift card from last year.

“For some reason, gift cards aren’t spent as quickly as a cash gift,” says Bill Hardekopf, CEO of LowCards.com. “We slide them into a wallet or drop them in a drawer, lose them, or forget about them. We let that money waste away. The best time to use a gift card is soon after you receive it. Use them before you lose them.”

What happens to unused gift cards? The Securities and Exchange Commission allows companies to count unused gift card money as income once they can reasonably say the card won’t be redeemed. However, some states require unused gift cards to go to an unclaimed funds account. Those states can then use the unclaimed funds for general purposes until someone claims it.

Consumer Tips for Using Gift Cards

• Use them before they expire. Merchant and bank-issued gift cards must now be good for five years, thanks to the CARD Act provisions. Reloadable cards can expire five years after the money was last added.
• Research the fees. Some cards, like bank-issued cards, also charge fees, such as a monthly fee after 12 months of inactivity.
• If you will not use the card, or would prefer to have the cash, you can resell the card. There are several sites, such as Plastic Jungle or Cardpool, that are a marketplace to buy, sell, or exchange gift cards. You may receive as much as 80-90% back for your gift card. Some cards are worth more than others and the price can vary between sites.
• Turn your gift card into cash for investing or saving. GoalMine trades unused gift cards for cash to fund your GoalMine account. Receive 150% of the initial $50 of card value on your first card if you’re opening a new account, and market value for the rest.
• Donate your gift card to charity and get a tax deduction. Many national charities and foundations, like the Kidney & Urology Foundation of America, accept gift card donations.

Photo by jpmarth

Related Posts:

• None yet, check back soon!

Debit Card Interchange Fee

The government regulation of the debit card interchange fee was the most controversial issue of the year. The Durbin Amendment to the Dodd-Frank financial overhaul bill went into effect on October 1. Before the legislation, the interchange fee averaged 44 cents per transaction. Now, the reduced fee is 21 cents plus an additional amount to cover losses from fraud. This cost the banks billions of dollars in lost revenue. The interchange fee was intended to resolve a bitter issue for merchants but it also ignited unintended consequences for consumers, such as banks dropping rewards for debit card purchases in the spring and proposing to add fees for debit card usage in the fall.

Banks Add, Then Rescind, Debit Card Fees

A number of banks introduced a debit card fee of $3 to $5 each month that the debit card was used for a purchase in order to make up for the revenue lost from the reduced interchange fee. But the public rebelled when Bank of America added the $5 fee in September. This fee received condemnations from consumers, Congress, and President Obama. Some consumers even declared a Bank Transfer Day on November 5. Banks quickly backed down and dropped the fee at the end of October.

Greater Rewards for Credit Card Consumers

After the credit crash in 2008, credit card issuers cut back on the rewards offered to new cardholders. But in 2011, nearly every issuer ramped up the rewards, trying to attract new customers with good or excellent credit scores. Rewards are used to compete for new cardholders, as well as to encourage credit card spending and regular usage.

Some cards now offer very attractive bonuses based on usage. The Chase Freedom card began offering a $200 cash back bonus once a new cardholder spent $500 during the first three months. Capital One Cash was introduced during the year and offers a 50% cash back bonus on all you earn each year, plus an additional $100 bonus for spending $500 on the card during the first 90 days.

Earlier in the year, there were extremely attractive airline rewards. In March, Capital One created a buzz with the heavily promoted “Match My Miles Challenge” where consumers could earn up to 100,000 miles by switching and spending on the Venture Card. Chase followed with a promotion on the British Airways card where cardholders could receive an extra 100,000 miles by becoming a customer and reaching a certain spending level.

More Attractive Balance Transfer Offers

Balance transfer offers were also strong throughout the year. Issuers used very attractive offers to lure credit card customers to transfer their existing balance from a competitive card. Nearly every major issuer currently has a card where consumers can receive 0% APR for an extended period of time–Slate from Chase for 12 months; Capital One Platinum Prestige for 15 months; Discover More for 18 months; and Citi Platinum Select for 21 months.

Mobile Payments

Google Wallet debuted in September and mobile payments became a payment option for some smartphone users. Mobile payments allow consumers to make purchases or transfer money with a quick application downloaded to a mobile phone. Even though mobile payment systems are now available, plastic cards and cash won’t vanish tomorrow. Consumers and retailers will need convincing and incentives to make the switch. Consumers won’t save money by paying with a mobile phone. The same fees and interest rates for consumers and interchange fees for retailers will apply to mobile payments. Retailers are also reluctant to spend the money to buy the equipment necessary to link your cell phone to their cash registers.

Defaults and Delinquency Rates Decline

It is a much healthier environment for credit card issuers in 2011. Credit card defaults and delinquencies declined during most months this year. Credit cardholders and issuers both made changes over the past couple years that brought an excessive system of credit card borrowing and lending back under control. Many of the borrowers who could not pay off their debt had already defaulted, while others have diligently paid down their balances and used other forms of payment to avoid the high interest rate penalties. Credit card issuers closed risky accounts, cut credit limits on millions of accounts, and tightened lending standards to cut their risk of defaults and late payments.

Credit Card Issuers Drop Some Fees

Some banks tried to polish their tarnished image by dropping some credit card fees. Chase is now offering a Slate card that for a limited time does not charge a 3% fee for balances transferred during the first 30 days that the card is open. Other issuers have eliminated the foreign transaction fee on certain cards. Discover dropped its 2% foreign transaction fee; Chase eliminated its 3% foreign transaction fee on the Sapphire Preferred card; and Citi dropped its 3% fee from the ThankYou Premier and ThankYou Prestige cards. Avoiding the foreign transaction fee is a significant savings for travelers, but also for consumers who make a purchase from another country or even a purchase that is routed through a foreign bank.

Additional Protections for Cardholders

The Federal Reserve Board approved a rule designed to provide additional protections for credit card consumers. The Board’s rule amended Regulation Z (Truth in Lending) to clarify prior rules implementing the Credit Card Accountability Responsibility and Disclosure Act of 2009 (CARD Act).

The CARD Act required issuers to consider a consumer’s ability to make payments before opening a new credit card account or increasing the credit limit on an existing account. Issuers must consider the consumer’s individual income or salary. The application can no longer request “household income” because that term is too vague. As a result, stay-at-home parents now find it much more difficult to be approved for a credit card.

It also clarified that promotional programs, like introductory rates that waive interest charges for a specified period of time must follow the same rules as promotional programs that apply a reduced rate for a specified period. Offers that waive interest charges during an intro period cannot revoke the waiver and charge interest during the intro period, unless the account becomes more than 60 days delinquent.

Consumer Financial Protection Bureau Opens

Credit cardholders now have a place to file a complaint against their credit card issuer. The new Consumer Financial Protection Bureau (CFPB) was created by Congress through the Dodd-Frank Act. While it still does not have a director, it opened in July. It offers consumers a webpage just for credit card complaints. During its first three months of operation (July 21 through October 21), the agency received 5,074 complaints. The most common complaints involved billing disputes (13.4%), interest rates (11.0%), and identity theft or fraud (10.8%). Most of the complaints (84%) were sent to credit card issuers for review and response. Issuers reported either full or partial resolution of 74% of the forwarded complaints, and 71% of these consumers did not dispute the responses provided.

Government Issues Debit Cards for Tax Refunds

The U.S. Treasury started issuing debit cards (MyAccountCard Visa Prepaid Debit Card) instead of paper checks for tax refunds to low income individuals. The Treasury Department is converting to debit cards for several reasons. For the government, they are less costly to mail than checks. For the recipient, they provide a safer, faster and more convenient way to distribute money than checks. Many low income individuals do not have bank accounts and the cashing of these refund checks can be costly. The government hopes the distribution of these cards cuts down on the costly refund anticipation loans that many low income consumers receive.

Photo via debtcovered

Related Posts:

• None yet, check back soon!

Credit agencies are finding new ways to collect and assemble data on individual consumers. Credit reports can now reveal evictions, applications for payday loans, even if you are behind on your homeowner’s association dues. Agencies analyze and sell this data to lenders, employers, insurers and renters who use these reports to make judgments about you.

Credit agency CoreLogic will soon provide credit files that dig deeper than the three traditional credit bureaus–Experian, TransUnion, and Equifax. According to the New York Times, this will include property tax liens, if more is owed on a house than it is worth, or if someone is behind on homeowner’s association dues. It may also include payment history for utility and cell phone bills. This data will be available in March for mortgage and home equity lenders, but it could eventually be developed for other types of credit. CoreLogic combined property and mortgage information; legal, parcel and geospatial data; motor vehicle records; criminal background records; national coverage eviction information; payday lending records; credit information; and tax records.

In February 2011, Experian purchased RentBureau, a credit bureau that allows apartment owners and managers to share rental payment history. These rental payment histories are now factored into Experian’s consumer credit reports.

“As agencies add more information to credit reports, there is a greater chance for negative entries and black marks to show up on your credit report,” says Bill Hardekopf, CEO of LowCards.com. “Extended reporting could be bad news for households that are already living on the edge and struggling to pay the bills each month. A missed payment here and a late payment there can add up. Unfortunately, there is no loan officer to look at the whole story. Financial histories and futures could now be judged by algorithms.”

Having a good credit report means access to loans with lower interest rates; lower interest rates translate into smaller monthly payments and keeping more money in your pocket. A good credit report can also help you qualify for a job, insurance or an apartment. A bad credit report can lead to higher interest rates, housing rejections and a more difficult job search.

Tips for Building a Better Credit Report

• Review your credit report and make sure all of the debts are accurate. Each year you can get a free credit report from the three credit bureaus (Experian, TransUnion, Equifax) through AnnualCreditReport.com.
• Know your rights. Under the Fair Credit Reporting Act, both the credit reporting company and the information provider are responsible for correcting inaccurate or incomplete information in your report. Tell the credit reporting company, in writing, what information you think is inaccurate. Include copies (you keep originals) of documents that support your position. Credit reporting companies must investigate the items in question unless they consider your dispute frivolous. When the investigation is complete, the credit reporting company must give you the written results and a free copy of your report if the dispute results in a change. If the negative information in your report is accurate, you must wait out the time for its removal. A credit reporting company can report most negative information for seven years and bankruptcy information for 10 years.
• Pay all your bills on time. Late payments, the most common piece of negative information appearing on credit reports, are often responsible for significant drops in credit scores. Make at least the minimum payments on your credit cards and loans on time each and every month. If you have a good payment history but slip up with a random late payment, ask your lender to erase the late payment from your credit history.
• If your have a good credit card, keep it. Maintaining a card and building a good payment history looks good on your credit report and helps build your credit score. Creditors want you to have a long, dependable credit history.
• If you are just getting started, don’t open several new accounts all at once because that will lower your average account age. Opening too many accounts during a short period could indicate you are desperate for money and are a credit risk.
• Pay off your debt. High balances and high debt ratios can drag down your credit score. If you are having trouble paying your bills, contact your creditors to work out a payment plan or see a legitimate credit counselor. This will help you manage your credit and improve your score over time. A good place to start is the National Foundation for Credit Counseling.
• Get a checking and a savings account.

Photo by mikezenero

Related Posts:

• None yet, check back soon!

Fresh off the heels of consumer protests over monthly debit card fees and “Bank Transfer Day” is a new movement that speaks out against high credit card rates.

December 11 has been deemed “Balance Transfer Day” where consumers are encouraged to switch from high interest credit cards to lower or zero rate cards.

The Balance Transfer Day’s Manifesto statement on Facebook encourages consumers to “demand the same 0% interest rate that banks receive from the federal government” and “create our own bailouts by using a balance transfer as a means to bail ourselves out of credit card debt.”

“Criticizing high interest rates is a fair point, and encouraging cardholders to transfer balances to a card with a lower rate can help save them money in interest payments. This is a good reminder to shop around at other banks and credit unions to see if you can get a better deal, especially as you start the new year with resolutions to improve your finances,” says Bill Hardekopf, CEO of LowCards.com and author of The Credit Card Guidebook. “However, getting a lower credit card rate may not be as easy as transferring your account to another bank. The rates you receive are based on your credit score. If your score is low, then your interest rates are going to be higher and you are going to have fewer options. The only real way to pay 0% interest on a credit card is to pay off the entire balance each month.”

Tips When Transferring a Credit Card Balance

• Balance transfers are usually not free. Most come with a balance transfer fee, typically 3% or 4% of the total amount you transfer. However, Chase is currently offering a special balance transfer offer on the Slate card where there is no transfer fee. Before you apply for any balance transfer card, do the math to see if the amount of interest payments you save with the introductory offer is more than the balance transfer fee that has to be paid immediately.
• If you feel you will be unable to pay off the entire balance during the introductory period, pay attention to the interest rate that you will pay after the introductory rate expires. In this case, a low APR for the long-term could be more important than the length of the introductory period.
• If you currently have a low credit score, you may not receive the introductory offer that is advertised. The ongoing APR you receive may be higher or your introductory period may be shorter. Or you may not be able to transfer your total balance.
• If you do transfer your balance, you must pay your credit card bill on time every month. If you have a late payment, your introductory period will likely end and you will be assessed the ongoing APR on the transferred balance.
• The introductory rate may only be applicable for the amount you transferred. Unless the introductory offer specifically includes new purchases, any purchase made with the new card will be at the ongoing interest rate.
• If the offer you receive does not meet your needs, decline the card. Limit the number of applications because multiple credit applications are a red flag on your credit report and can lower your credit score.
• The new issuer pays the amount of the balance directly to the old issuer and the amount you owe them will be reduced by the amount you transferred. The available credit on your new account will be reduced, as if you had made a purchase.
• It takes about four weeks for the balance to be transferred. Continue to make all required payments until you confirm that the balance transfers were made. Transferring a balance does not automatically close your old account. If you want to close that old account, contact the issuer immediately.

Attractive Balance Transfer Credit Cards

• Slate from Chase–Limited Time No Balance Transfer Fee
  No balance transfer fee for the first 30 days of account opening, a 0% introductory APR for up to 12 months on transfers and purchases, and no annual fee. The ongoing APR is 11.99-21.99%.
• Citi Platinum Select
  This card offers 0% interest rate for 21 months on both the balance transfer and new purchases. The balance transfer fee is 3%. The ongoing APR is 11.99-20.99%.
• Discover More
  This special Discover More offer is for 0% interest on balance transfers for 18 months. Consumers also receive 0% on purchases for 6 months. The balance transfer fee is 3% and the ongoing APR is 11.99-20.99%.
• Capital One Platinum Prestige
  Consumers receive 0% interest until February 2013 on both purchases and balance transfers. The balance transfer fee is 3%. The APR is 10.90-18.90%.

Related Posts:

• None yet, check back soon!

However, new federal regulations that went into effect on October 1 may prevent some people, like stay-at-home parents, from getting their own credit card.

The new rule is part of the CARD Act and says credit card issuers must only consider the applicant’s own salary or other income. Any person that applies for a card must be able to make his or her own payments. Household income or combined income is no longer considered in the approval process. This means a stay-at-home parent who has no outside income will find it very difficult to get approved for a credit card.

“The intent of limiting credit cards to individuals who can afford them is a good idea, but just like many regulations, there are unintended consequences,” says Bill Hardekopf, CEO of LowCards.com. “This is a bigger problem than just the name on a piece of plastic. Credit card payment history is an important component in a credit score. If you aren’t building a good history with a credit card in your own name, this could drag your credit score and may cause higher rates with future loans or become a reason for rejection during job interviews.”

Before the regulation, a person could get a credit card account based on the income of another family member. The stay-at-home spouse could get a credit card in his or her own name based on the salary of the working spouse.

This new income requirement only applies to new accounts. It does not affect existing credit card accounts.

Other Credit Options

• Secured Cards
  If you don’t qualify for a credit card in your own name, you may want to consider a secured card. The credit limit will be the amount of your deposit. But cards like Capital One’s Secured MasterCard may give credit line increases based on your payment and credit history.

  “Secured cards can be a good place to start when you can’t get a credit card,” says Hardekopf. “Make sure the card reports to all three credit bureaus so you get credit for a good payment history. If you carry a balance, you will still have to pay interest, so pay off the card each month. Many secured cards have higher interest rates than standard credit cards.”

• Authorized User
  You can also become an authorized user on your spouse’s credit card. Your name will appear on the credit card and you will have full charging privileges, but you are not the owner of the account. The lender will report the credit information of both you and your spouse to the credit bureaus. FICO includes authorized accounts in its score calculation and if your spouse has a good payment history, this can boost your credit score. Vantage Score does not use authorized user accounts in its formula.

  “Keep in mind that there are some risks to authorized accounts,” says Hardekopf. “If your spouse already has a low credit score, it won’t improve your score. If they have a late payment, or a high balance, this can also drag down your score.”

Photo via debtcovered

Related Posts:

• None yet, check back soon!

6 Tips for Using Reward Credit Cards to Maximize Your Holiday Shopping

• Use your rewards points. These can be used to buy gift cards with many retailers. An example: you can use American Express Membership Reward points to shop at Amazon.com to pay in full or for part of your purchase.
• Pay attention to partner programs. Most credit card issuers have a partner program that offers discounts or bonuses for online purchases with certain companies. The program varies by issuer, but the partners could be stores where you already shop. Discover turns $20 rewards into $25 gift cards. Citi gives you an additional 1%-5% cash back when you shop at their online partners. Capital One is adding bonus rewards for purchases made from November 25-28 with some retail partners in its online shopping portal, Perk Central. Some retailers include Lands End (100% rewards increase), Macy’s (40% rewards increase), Lego (100% rewards increase) and Gamestop (40% rewards increase).
• Look for 5% rotating cash back offers. Chase Freedom, Discover More and Citi Platinum Select offer an attractive 5% back on the spending on designated categories for a specific amount of time. The October-December bonus categories for these issuers focus on shopping and entertainment. If you have these cards, remember to sign up for these attractive rebate offers each quarter since enrollment is not automatic.
• Check for spending bonus opportunities. Chase Freedom offers $200 spending bonuses for new applicants who reach a set spending limit–$500 within three months. Holiday shopping is the best time to quickly reach these limits and then use the bonus to pay off your balance.
• Pay attention to reward limits. Some cards, like Discover More (5% cash back on up to $300 in purchases each quarter), place a limit on the bonus. After you reach the limit, switch to another bonus card.

Best Reward Cards for Holiday Shopping

• Capital One Cash
  Offers 1% cash back on every day purchases and a 50% anniversary bonus on cash earned on purchases in the previous year. It also gives a one-time $100 bonus once you spend $500 in the first three months. No annual fee.
• Chase Freedom $200 Cash Back Bonus
  Get $200 cash back after you spend $500 in your first three months. Earn 5% cash back on dining, department stores, movie theaters, and charitable giving. No annual fee.
• Discover More
  0% APR for 15 months on purchases and balance transfers. Earn 5% Cashback Bonus on up to $300 in purchases at department stores, clothing stores and restaurants and 1% on all other purchases. No annual fee.
• Citi Thank You Preferred
  Earn 10,000 bonus ThankYou points after $500 in purchases within the first three months, good for a $100 gift card. Earn five ThankYou points for every $1 spent on all purchases at gas stations, supermarkets and drugstores during the first 12 months and one point for every $1 spent thereafter. No annual fee.
• Continental Airlines One PassPlus Card
  Earn 25,000 bonus miles the first time you use this card. This is enough for a round trip ticket within the United States and Canada. The $95 annual fee is waived the first year.
• BankAmericard Cash Rewards
  Gives a $50 cash rewards bonus after you make at least $100 in purchases within 60 days of account opening.

Photo by S.A. Young

Related Posts:

• None yet, check back soon!

According to the law, which took effect in July of this year, credit card networks can no longer force merchants to accept credit cards for purchases of less than $10 as long as they don’t discriminate based on card network or issuer in doing so.

Credit card networks had previously prohibited the practice for fear that is would diminish the ubiquity of their brand names. For example, Visa cards would no longer take you “everywhere you want to be.” What’s more, it would simply cost them money, given that each time a credit card is swiped at a merchant location, the merchant has to pay interchange fees to both the bank that issued the card (i.e. Chase, Capital One, etc.) and the credit card network itself (e.g. Visa, MasterCard and Discover). However, since these fees disproportionally affect the profit margins of small purchases, merchants would often simply ignore card network rules.

To help formally alleviate these burdensome fees and provide a measure of financial relief to small business owners, Congress stepped in. So, one question you may be asking yourself is: Why haven’t we heard much about this part of the Dodd-Frank Act?

The answer is simple: because of interchange fees…debit card interchange fees, that is. The Dodd-Frank Act also gave the Federal Reserve power to regulate debit card interchange fees, and this consumed so much attention that little was left for lesser aspects of the law. Banks and merchants argued fervently about the Fed’s proposed interchange fee cap, which would wipe out around $9 billion in interchange fees annually, according to Card Hub.

To consumers, this rule is a potential hassle and definitely something to get used to. To merchants, it lowers costs and decreases the control card networks have over them. But the real question is: Is this a good law?

In short, yes, but more needs to be done. While a good first step, allowing merchants free will in choosing when to accept credit cards is only a half measure in terms of creating a truly competitive payments industry. A better move would be to allow merchants to do exactly what the new law says they can’t: discriminate based on card network. Give merchants the ability to set prices based on the method of payment used (i.e. give discounts and assess surcharges depending on the interchange fee being charged), and card networks will lower the fixed costs associated with payment processing so as to prevent their products from becoming irrelevant. The more competition, the better for everyone.

This article was written by our friends at Card Hub, a leading credit card comparison website and marketplace for selling unwanted gift cards.

Photo by Emad Seyadali

Related Posts:

• None yet, check back soon!

Debit Fee Retreat Complete

The banking industry’s brief experiment with charging customers to use their debit cards appears to be over. The about-face concluded on Tuesday when Bank of America Corp. dropped plans to charge customers $5 a month for using their debit cards to make purchases. Bank of America was the last major bank to back away from the fees, representing a swift retreat in an industry that is at times known for its lumbering decision-making. More fees are expected. Banks have already eliminated the free checking accounts that had been in place since the 1980s and dismantled rewards programs for debit cards. Banks now may raise existing fees on checking accounts, find new places for additional charges and institute more internal cost-cutting.

Photo by Bravo Six Niner Delta

Economy Top Concern Among Shoppers at Start of Holiday Season

As we approach the 2011 winter holidays, Americans remain fixated on finances: their own and that of the nation. Four in 10 of those surveyed by Consumer Reports said their biggest concern going into the holidays was the state of the economy and having enough money in their own pockets. Last year, more than half–53%–of Americans paid for some or all of their purchases with plastic, charging $433, on average, worth of gifts. That’s slightly higher than the percentage that relied on credit the previous year. However, heavy credit card users have mended their ways at least somewhat. The percentage of shoppers who charged $1,000 or more dropped in 2010 to 16%, down from 23% in 2009. Unfortunately, too many consumers still carry too much debt for too long. As of this month, 6% of Americans–around 14 million people–were still paying off their credit card purchases from the 2010 holidays.

Photo by S.A. Young

U.S. Banks to Push Prepaid Credit Cards

U.S. banks that have lost debit card processing revenue due to new caps on fees will likely push customers into prepaid and credit cards and other types of account fees. Executives for regional banks–including BB&T, SunTrust, Fifth Third Bancorp and Sovereign Bank–said at an industry conference that there is no one solution for recovering as much as $8 billion in lost revenue under new caps on what banks can charge merchants for processing debit card transactions. But lenders will charge customers fees for their overall banking accounts, rather than just debit card use, and push the use of prepaid and credit cards not covered by new debit card rules.

Photo by Orbitgal

Watch Out for These Five Credit Card Gotchas

Credit card issuers are back to inundating consumers with offers, many of them featuring low teaser rates, but be sure to read the fine print before signing on. Consumer Reports did just that, analyzing dozens of credit card offers. Here are some typical gotchas to be aware of: seasonal savings, spending tiers, expiration dates, hidden caps, missed payment penalties. More consumers are being approved for new credit cards; only 14% were denied a card in 2011, compared with 24% last year, according to new survey data from the Consumer Reports National Research Center. But 35% of respondents also reported experiencing at least one credit card problem, such as a new annual fee, higher interest rate, lower credit limit, or limits on rewards.

Photo via debtcovered

A Program that Rewards Not Spending

For years, credit cards have been offering rewards to consumers who spend. Now, a new company does just the opposite: it rewards consumers who save. And the prizes are eye popping: a trip to Hawaii, a Toyota Prius, a $50,000 college scholarship. The catch? Good luck getting them. SaveUp rewards consumers who pay down their debt or put more cash into their bank accounts. Here’s how it works: consumers link their debts (including credit cards, car and student loans, mortgages etc.) and bank accounts from pretty much any U.S. bank to their SaveUp account. The site automatically awards 1 credit for every dollar saved or every dollar of debt paid off. Not only is it encouraging healthy financial behavior, but consumers can rack up rewards points much faster than when they swipe their credit card. Most credit cards give just one to three cents back on every dollar a consumer spends. And there’s no cost to using SaveUp–it’s free to all consumers. At SaveUp, on the other hand, all that’s guaranteed is a chance to win the big prizes in a kind of lottery drawing. Consumers can use their points to play games–like scratch offs, drawings and jackpots–for a shot at prizes. Each game, no matter the prize, costs 10 credits, which is equal to $10 that a consumer has saved or paid down in debt.

Equifax Says Consumer Debt is Rising Again

Consumer debt has reached pre-recession levels, according to the Equifax National Credit Trends Report. Consumer debt is now $11.2 trillion, almost the same as the $11.1 posted in 2006, before the recession began. This may be a sign that some consumers are again taking on too much debt and are a higher risk of default in the future. Other findings from the report: new consumer credit (auto loans, credit cards, consumer finance loans, home equity lines, and student loans) originated between January-July 2011, was $436 billion, the highest total for that period in three years. In addition, consumers are beginning to use credit cards more, and as a result, balances increased from June-September 2011.

Photo by Collection Agency

LowCards.com Weekly Credit Card Rate Report

Based on the 1000+ cards in the LowCards.com Complete Credit Card Index, the average advertised APR for credit cards is 14.12%, a slight decrease from 14.16% last week. Six months ago, the average was 14.01%. One year ago, the average was 13.79%.

Related Posts:

• None yet, check back soon!

This follows a flurry of activity during the last few days from other banks that also dropped a debit card fee.

Yesterday, two banks that had already instituted the fee reversed their decisions. Regions Financial Corp ended their $4 monthly charges that had started October 1. SunTrust dropped their $5 per month fee which began in June. Both banks said they will reimburse their customers.

Last Friday, Chase and Wells Fargo announced they were ending the monthly debit card fees they were testing in various states.

“This is great news for consumers, but this is not the end of new fees,” says Bill Hardekopf, CEO of LowCards.com. “Banks are still losing billions of dollars in revenue from the interchange fee regulations. They will find more subtle ways to make up for this lost revenue, increases that may fly under the radar. Banks may increase existing fees or raise the introductory interest rates on credit cards. They will find some way to increase their revenue, and it’s always the consumer that will end up paying for these increases.”

Photo by Bravo Six Niner Delta

Related Posts:

• None yet, check back soon!

Card Tricks Win Big Rewards for Some Travelers

Want a free trip to Paris? Just sign up. Hardcore collectors of frequent flier miles are turning credit card sign up bonus offers into vast stashes of miles, points and expensive trips by opening new card accounts by the dozen. Some practitioners call it travel hacking, and at a time when travelers are frustrated by declining service and growing airline fees and fares, it represents a rare travel bonanza. Most new cards are free since issuers typically waive annual fees for the first year. Sign up bonuses come with requirements to charge $1,000 or so on the card within the first few months. People who churn cards say it’s important to meet these requirements and pay off balances to avoid hefty finance charges. They also typically check their credit ratings regularly. Credit experts say opening and closing card accounts can hurt your credit score, but the degradation is usually small and recovers within a few months.

Photo by davipt

Bank of America Loses Title as Biggest in U.S.

For Bank of America, it is the end of an era. With the bank shrinking its balance sheet and selling off assets, the company surrendered its title as the country’s biggest bank Tuesday, another sign of how a money-losing giant assembled over decades is being reshaped into a smaller and, investors hope, more profitable institution. Bank of America, with $2.22 trillion in assets reported Tuesday in its third-quarter earnings, is now second to JPMorgan Chase, which has $2.29 trillion assets. It also ranks second to JPMorgan Chase in terms of branches and total deposits.

Photo by Bravo Six Niner Delta

U.S. to Require Travel Declarations of Value Cards

International travelers would have to file reports when carrying prepaid access cards and devices loaded with large amounts of money in or out of the United States, under a U.S. Treasury proposal made under pressure from Congress. The rule, unveiled on Wednesday, is not expected to have a substantial impact on ordinary travelers, many of whom use debit or credit cards when overseas. The rule represents an effort to get ahead of what law enforcement officials and others fear could be significant new digital tactics in international money laundering by drug dealers, militant groups and others. The proposal would add prepaid devices–such as prepaid cards, gift cards, and potentially cell phones–to the list of “monetary instruments” whose value must be aggregated. When the total exceeds $10,000, the traveler would have to file a Currency and Monetary Instrument Report CMIR.L under the Bank Secrecy Act, a U.S. law aimed at combating money laundering and tax evasion.

Photo by jpmarth

ATM Suit Against Visa, MasterCard Latest Tussle Over Card Fees

The National ATM Council Inc., a group that represents independent operators of automated teller machines, on Wednesday filed a suit in U.S. District Court for the District of Columbia seeking national class-action status accusing Visa and MasterCard of anticompetitive practices. The group argues that rules by Visa and MasterCard requiring ATM operators to charge equal fees to access the credit card companies’ processing networks amount to price-fixing. The group’s members want the ability to charge consumers lower fees if their ATM transactions are completed over smaller processing networks that compete with Visa and MasterCard. Many banks that issue Visa- and MasterCard-branded debit cards also equip their cards with other networks. The inability to charge different prices results in “fees that inflate the retail price of ATM services and discourage consumers from consuming them,” the suit said.

Photo by lawrence_thefourth

Major Credit Card Issuers Report Growth in Delinquencies

Credit card delinquencies, defined as payments late by at least 30 days, increased slightly for five of the top six card issuers in September. While these increases were relatively small, it broke the trend of declining delinquency rates that the industry had recently experienced. It could be a signal that consumers are again struggling to pay down credit card debt and are a higher risk for default in the future. The growth in late payments may lead banks to set aside more money to prepare for future losses. On a positive note, all six major credit card issuers reported further declines in the default or charge-off rates.

Photo via debtcovered

Citi’s Move to Keep Credit Portfolio Latest Boost for Card Industry

Citigroup Inc.’s decision to retain rather than sell a portfolio of retail credit cards is the latest boost of confidence for the card industry. Citi’s portfolio includes credit cards issued on behalf of the merchants including Sears, Home Depot and Zale. Besieged by high loan loss rates and a stagnant economy, many lenders that specialized in so-called partnerships cards turned their backs on such programs during the recession to get their portfolios in order. But store cards have experienced a resurgence of sorts in the last year as the performance of many lenders has improved, with Citi’s announcement Monday the latest sign of a comeback. Since putting the retail card portfolios in Citi Holdings, the bank has worked to improve its marketing of the programs to ensure it and its partners are targeting the most ideal borrowers.

Photo by Andres Rueda

In Battling Merchants, Banks Still Hope to Overturn Durbin Rules

The Durbin Amendment–the legislation that limits the fees banks can earn for debit card transactions to a scale that is “reasonable and proportional”–was signed into law more than a year ago. It survived the financial sector’s strong objections to the Federal Reserve’s aggressive first swing at regulating those fees, as well as subsequent efforts in Congress to delay adoption of the new rules. Those new rules, which were eventually watered down in a compromise that left advocates fuming, took effect October 1. Even so, opponents persist. Last week they rallied behind a pair of junior representatives, one Republican and one Democrat, who on Tuesday introduced a bill to turn the clock back on interchange fees.

Photo by Helcim

Bank of America’s $5 Debit Card Fee is a Tax on the Disloyal

Just think of Bank of America’s controversial $5 monthly debit card fee as a surcharge for unfaithfulness. When asked about the fee on a recent conference call, CEO Brian Moynihan said “a lot” of customers will be able to avoid it by keeping most of their business with the bank. But the level of business needed, either a very wealthy account, mortgage or other big relationship is out of many customers’ reach. Moynihan apparently cares only for near-exclusive relationships.

Photo by MoneyBlogNewz

Consumers Will Switch Banks Over Debit Fees, Survey Finds

About 30% of U.S. consumers said they’d leave their banks over fees for using their debit cards, according to a survey by the Research Intelligence Group. About 43% said they’d switch to paying cash or credit cards if their bank implemented charges, while 13% said they’d pee the fee if it was “reasonable,” according to the survey. The survey comes as the largest of banks, including Bank of America, are testing or planning to start charging fees of as much as $5 a month for consumers who have a debit card or use one for purchases. Low- to middle-income consumers are more likely to pay the fees, according to the survey. About 22% of those consumers, defined as those households earning $35,000 to $49,000 a year, would be willing to pay the fee, compared with the 14% of consumers whose households earn $100,000 or more.

Photo by Zuuply

LowCards.com Weekly Credit Card Rate Report

Based on the 1000+ cards in the LowCards.com Complete Credit Card Index, the average advertised APR for credit cards is 14.26%, a slight decrease from 14.29% last week. Six months ago, the average was 14.13%. One year ago, the average was 13.80%.

Related Posts:

• None yet, check back soon!

Banks Hope Credit Card Usage Increases Due to New Debit Card Fees

Consumers are outraged that banks are now charging monthly fees if they use their debit cards. Regions and SunTrust have already levied this monthly fee; Bank of America will begin charging a fee in 2012; and Chase (one state) and Wells Fargo (five states) are testing this fee in various areas. The common explanation from banks is that they are losing billions of dollars in revenue from the Durbin Amendment which basically cut the interchange fee on debit card transactions in half. Banks feel they need to make up for this loss of revenue, and charging customers to use their debit card is one way to generate revenue. But could there be another reason for a monthly charge on debit cards? Are banks trying to indirectly force consumers to use credit cards because credit cards are much more profitable to these financial institutions? If consumers choose to now go without a debit card in order to avoid these monthly fees, consumers will turn to other forms of payment, and credit card usage could increase dramatically. That would be great news for banks because credit cards are a much greater profit center for two reasons.

Photo via debtcovered

The Math Behind Bank of America’s $5 Fee

Why $5 a month? Because that’s a reasonable amount to assume the bank will lose per customer under the new [interchange] fee structure. The old fee was 44 cents per transaction and the new maximum fee is 24 cents, making for a loss of 20 cents per transaction per customer. Assuming the average customer makes 25 debit card transactions each month, that’s $5 per customer that Bank of America is losing under the new swipe fee. Charging each customer who uses a debit card to make a purchase an extra $5 a month, the bank makes up for the lost revenue. Interestingly, the $5 fee will not be charged to customers who have a debit card and use it only at ATMs. ATMs have their own set of fees, not affected by the new swipe fee rule.

Photo by Bravo Six Niner Delta

The Dick Durbin Bank Fees

Conceived of as a narrow special interest giveaway to large retailers, the Durbin Amendment will have long-term consequences for the consumer banking system. Wealthier consumers will be able to avoid the pinch of higher banking fees by increasing their use of credit cards. Many low income consumers will not. Banking will become less innovative and consumer-friendly. As many as one million individuals will drop out of the mainstream banking system and turn to check cashers, pawn shops and high-fee prepaid cards. Consumers will also be encouraged to shift from debit cards to more profitable alternatives such as credit cards, which remain outside the Durbin Amendment’s price controls. Prepaid cards, also exempt from the Durbin Amendment’s price controls, may also become a more attractive alternative to debit cards for many consumers. These cards were once the province of low income consumers without bank accounts, but over the summer American Express rolled out a new prepaid card aimed at higher-income consumers looking for alternatives to debit cards.

Photo by Orbitgal

Banking on a New Generation of Credit Alternatives

Financial institutions, which tend to ratchet up their fees across a wide swath of their customer base to make up for lost income, have always banked on the “stickiness” of their customers. While customers may have been “stuck” several years ago, that is no longer the case. Companies such as Google, PayPal and Square are not offering a wide range of alternative payment mechanisms that could finally mean lower transaction costs for consumers. Instead of competing with smaller community banks, the largest financial institutions will be forced to contend with new technology options that enable consumers to make payments at the point of sale, often without the need for a debit or credit card. (Google Wallet enables prepaid cards) This is exciting stuff if you’re a customer, and downright frightening if you’re a financial institution. It’s one thing to compete with a sleepy community bank for your business, it’s another thing entirely to compete with Google. When customers feel at home using tablets and smart phones to make payments, they have less inclination to pull a piece of plastic out of a leather wallet. For now, these payment alternatives have a significant amount of ground to make up before they truly represent a threat to financial institutions and the old way of doing business. It may be too early now to talk about the Law of Unintended Consequences, but years from now, we may owe a debt to reforms like Dodd-Frank for finally weaning us off the physical wallet and encouraging us to experiment with the new technologies helping to create the Digital Wallet. Why carry around a wallet full of plastic when your smart phone or tablet can do the same thing? Better yet, why pay higher fees for financial services when technology will soon make it possible to get a similar service at a cheaper rate?

Chase’s Card Chief Rebuilds Business Part By Part

Gordon Smith, credit card chief of JPMorgan Chase, is applying several lessons taken from the consumer finance industry’s play book; improving customer service, combining many rewards programs into one and shedding cards that are not profitable enough. Along the way, he is spending hundreds of millions of dollars mailing card offers. Step back and look at what Smith is building, and it looks a lot like American Express: a business that caters to rich clients and relies increasingly on processing fees to make money. Chase starts with some big disadvantages. Although it Paymentech processes transactions for merchants, it does not run the Visa or MasterCard global networks that accept its cards and influence how much it can charge for credit card transactions. Chase’s credit card business is second in size only to American Express, and contributed 12% of JPMorgan’s $17.4 billion of profits last year. If Smith pulls off the transformation, the rewards could be handsome. Smith is making progress. Profits have recovered under his watch. He’s improved the bank’s customer service rankings for credit cards, and he is getting ahead of competitors who also issue MasterCard and Visa cards.

Photo by Neubie

Credit Card Company Stocks Charge Ahead

An unexpected group of defensive stocks is emerging from the chaos of the stock market: credit card companies. Stocks of MasterCard and Visa, which run the processing networks for credit card transactions, are charging ahead, climbing 40% and 21%, respectively, this year. They have far outpaced typical defensive sectors such as utilities, up 4.2%, and consumer staples, up 0.5%. Credit card companies typically aren’t considered defensive plays due to the cyclical nature of the financial sector. Profits also have increased. In the most recent period, MasterCard reported a 33% climb in earnings and Visa jumped 40%. Discover’s profit more than doubled, and American Express’s profit rose 31%. Discover said its late-payment rate dropped to a 25-year low, a trend generally experienced by other lenders. Customers also are starting to increase outstanding credit card balances, garnering bigger interest income.

Photo by Kate – Collective Contemplations

LowCards.com Weekly Credit Card Rate Report

Based on the 1000+ cards in the LowCards.com Complete Credit Card Index, the average advertised APR for credit cards is 14.27%, a slight decrease from 14.28% last week. Six months ago, the average was 14.17%. One year ago, the average was 13.72%.

Related Posts:

• None yet, check back soon!

To be honest, however, the prime concern of insurance companies is to make money. We’ve all seen the bad press that has exposed the insurance companies over the last few years, but that doesn’t change the fact that we have to deal with them. Armed with this knowledge, however, we can go into dealing with the insurance companies on more equal ground.

Use Modern Methods
The Internet is the place to find everything these days, including insurance. If you take the time to look online, you will find out in no time that the big insurance companies’ websites give you full access to everything you need to get started on a policy. It’s a lot easier than it was just a few short years ago to shop for the best insurance rate. Let’s look at some things you can do online while shopping. You may have been shopping for a new car, and just got a car title loan online, so now it is time to get the right insurance coverage. Here are some tips:

Use a “Big” Company
Your first instinct may be to use the very cheapest insurance you can find, but you have to ask yourself if you’ve ever heard of the company before. The worst feeling is when you go to file a claim and find out that the company you’ve chosen is not going to stand behind you – which is often the case with small companies.

Your Credit Score Matters
Before you even begin thinking about looking for a new insurance policy, make sure you check your credit score. Pay off any settlements and try to keep up with payments. You want your credit score to be above 650, at the very least, to be in the area in which you may save money on your policy. Nobody likes it on a personal level, but nowadays your credit score is who you are to creditors and insurance companies. It lets them know how you are with your money and demonstrates responsibility. So if you have a good credit score, they will often give you a break on your premium.

Always Give Them All the Facts
Always tell your insurance company all the facts about your situation and answer all questions truthfully. Insurance fraud is a crime that often comes with jail time.

Check All the Big Companies’ Websites
Look at the sites of the companies that you are familiar with. Most of them will give you free online auto insurance quotes. You should also read reviews and talk to anyone you know that uses a particular company. Pick the company that meets your needs financially and has gotten good reviews.

“Group” Your Policies
Unless it is provided through your employer, you can usually lump your car, home, life, and health insurance together with the same insurance company, and most companies will give you discounts for doing so. You can also place multiple vehicles, such as those driven by teenage children, on a single policy to save some cash.

Do your homework and spend some time online as well. When it comes to your vehicle and proper coverage, there are many reputable companies offering instant cash title loans, free credit reports to see where you are at, and lots of options to make sure you are covered in case of an accident.

Photo by flirtcr

Related Posts:

• None yet, check back soon!

Starting early next year, Bank of America will charge $5 in each month that customers use a debit card for a transaction. There will not be a charge in the months you don’t use your debit card, and ATM withdrawals are not included.

Word of this new fee came two days before the October 1 implementation of the new interchange fee regulations for debit card purchases. Banks are expected to lose billions of dollars with this reduction in swipe fees. Before the recent legislation, the interchange fee averaged 44 cents per transaction. Now, the reduced fee will be 21 cents plus an additional amount to cover losses from fraud.

Banks are scrambling to make up for this lose revenue in a number of ways, and many major banks have added a monthly fee on debit cards. Bank of America is simply the latest, and largest.

Wells Fargo announced last month that it will test a $3 monthly fee for debit card users in five states: Georgia, Oregon, New Mexico, Nevada and Washington. Customers can avoid the fee if they don’t use their debit card or sign up for designated checking accounts. Chase is testing a monthly fee for debit card usage in northern Wisconsin. In June, SunTrust bank launched Everyday Checking that charges customers $5 per month for debit card use. Regions Bank will add a monthly $4 debit fee to certain accounts in October.

In addition to adding fees for debit card use, some banks have added monthly fees on checking accounts and eliminated debit card reward programs.

“Banks have lost a great deal of revenue in the past few years with the CARD Act and the Durbin Amendment. The banks have to make up for this loss of revenue with either new fees or increased rates, and it is always the customer that ends up paying for it,” says Bill Hardekopf, CEO of LowCards.com. “Charging fees on debit card use and checking accounts are two ways that banks can make a significant amount of revenue very quickly. And that is what we are starting to see.”

Photo by Bravo Six Niner Delta

Related Posts:

• None yet, check back soon!

“Mobile payments” allow consumers to make purchases or transfer money with a quick application downloaded to a mobile phone. Even though mobile payment systems are available today, plastic cards and cash won’t vanish tomorrow. Consumers and retailers will need convincing and incentives to make the switch.

Consumers won’t save money by paying with a mobile phone. The same fees and interest rates for consumers and interchange fees for retailers will apply to mobile payments. Retailers are also reluctant to spend the money to buy the equipment necessary to link your cell phone to their cash registers.

Google Wallet is the first mobile wallet entry, but it won’t be the last. At least three competing digital wallets (from Visa, PayPal and Isis–a joint venture of AT&T Mobility, T-Mobile and Verizon Wireless) are planned for launch later this year and in 2012.

Google Wallet will not replace your regular wallet. You will still need a place for your driver’s license and credit cards that are not a part of Google Wallet. Google Wallet plans to expand to include other banks, but if your bank is not one of the partners, your options are limited by Google Wallet.

Google Wallet is starting with a limited introduction and is currently not available on all mobile phones. If you own a Nexus S 4G phone from Sprint, you can download a Google Wallet app that will allow you to pay for purchases with Citi PayPass-eligible MasterCards or a Google Prepaid Card by tapping the phone on a PayPass terminal. Google Wallet can also work on Visa’s payWave System.

Tips for Using Mobile Payments:

Most of the electronic payment options are tied to credit cards and debit cards, and the same costs will transfer to mobile payments. Purchase protections vary by type of payment and it is up to the consumer to read the fine print and understand the risks of unauthorized activity or errors on their statement.

• Tie your payments to a credit card. This gives you the best protections no matter where you make your purchase. Credit card purchase protections, caps on liability and regulations will also apply to a mobile payment backed by a credit card. Under federal law, you are responsible for the first $50 in unauthorized charges after you notify your bank. You also have the right to dispute a charge and the right to charge back an item.

• Payments linked to debit cards also have the same purchase protections and liability as a standard debit card.

• Avoid billing to prepaid cards. Prepaid cards have more fees than credit and debit cards. They typically cost more and do not have the same purchase protections or caps on liability.

• Do not bill to gift cards. Gift cards do not offer purchase protections. If you must use a gift card for payment, keep the gift card receipt. If your phone is stolen, contact the merchant immediately to limit your losses.

• Avoid billing to your telephone account. These accounts offer no protections or caps on liability. Ask your carrier to block third-party charges to your cell phone or your landline. Consumers must pay the wireless company for disputed charges even if a report of a disputed amount was made and the report is pending investigation. If you do bill to a telephone company, place a cap on any third-party charges to your phone bill.

• If you lose your phone, immediately call your cellular carrier to disable your phone. Call your bank or credit card issuer to block access to your accounts.

• No matter what payment method you use, look carefully at your statements for any charges that are incorrect and report errors promptly.

• Send complaints to the Consumer Financial Protection Bureau.

• Stay within your budget. The easier the payment, the easier it is to make impulse purchases and spend more than you intended.

“Ideally, consumers should have strong protections against unauthorized transactions and billing errors with a mobile payment, no matter what form of payment is used,” says Bill Hardekopf, CEO of LowCards.com. “But this is new, and consumers have to know what they are signing up for and the risk. Mobile payments are another easy way to charge more than you can afford. If you can’t pay off your balance in full each month, don’t increase your credit card balance with mobile payments.”

Related Posts:

• None yet, check back soon!

Older Americans Held Hostage by Debt

More Americans are reaching their 60s with so much debt they can’t afford to retire. Most people used to pay off their debt before retiring. But as wages have barely kept up with rising prices over the past 35 years, Americans have pushed debt higher, living beyond their means. Now, people are postponing retirement, cutting living standards or both. All kinds of debt held by this age group have risen, but the big problem is mortgages. 39% of households with heads aged 60 through 64 had primary mortgages in 2010 and 20% had secondary mortgages, including home-equity lines, according to research group Strategic Business Insights’ MacroMonitor. That was up from just 22% and 12%, respectively, in 1994. Instead of boosting their savings as they approach retirement, a period when people usually make their largest retirement contributions, some older people are stopping contributions in order to service debts. Some who had already retired are going back to work because they can’t make the financial numbers add up.

Photo by Collection Agency

Fed Opts to Go Slower on Merger

Banking experts are questioning whether the Federal Reserve’s handling of Capital One Financial’s purchase of ING Direct signals a new chapter for the agency in the wake of the Dodd-Frank Act. The agency extended the comment period on the proposed acquisition from August 22 to October 12, adding three meetings in Washington, Chicago and San Francisco for input on the deal’s potential effects on consumers. The decision was handed down amid pressure from Rep. Barney Frank (D-Mass.) and consumer groups to put the brakes on a deal that would create the nation’s fifth largest bank. The agency has yet to define what constitutes a systematically risky merger, making its decision on Capital One all the more important as it may set the tone for future deals.

Photo by heyyouwakeup

Credit Card Balances Take Significant Decline

The Federal Reserve Consumer Credit Report released Thursday showed credit card borrowing in July took its first decline in three months. Revolving credit, which is made up primarily of credit card debt, dropped $3.4 billion to $792.5 billion in July. This represents an annual decline of 5.2%. This follows increases in both May (4.6%) and June (3.9%). Revolving debt decreased for 27 consecutive months between September 2008 and November 2010.

Photo via debtcovered

How to Save Significant Amounts by Knowing Your Credit Card Company Benefits

After the roller coaster weeks we’ve had lately regarding the economy, it’s time for some good news: your credit card companies are offering benefits that are worth significant money. And chances are, many of you don’t even know it. According to a new study from MasterCard, 55% of consumers aren’t familiar with the benefits their credit cards offer. Yes, you know about the rewards points, the cash back, the airline miles. But you may not know about the insurance coverage, purchase protection and extended warranties that may be provided by your card, gratis. Here’s a rundown of what you might be missing.

Photo by Andres Rueda

Banks Offering College Students More Perks and Benefits

While banks have peeved plenty of customers this year by hiking fees on checking accounts and killing debit rewards programs, they’ve also been courting one group with better perks and benefits: college students. As students head back to campus this year, banks are pitching them products with better terms, including longer zero-interest promotional periods on credit cards, no-fee checking accounts and more flexible debit card rules. And in most cases, these perks are attached to credit cards and checking accounts that the banks have designed exclusively for college students. While data doesn’t exist on the growth of products aimed specifically at students, banking experts say the number of deals is clearly growing–and will continue to do so.

Photo by Student Finance Domain

Credit Card Tips for International Travelers

Credit cards can be a convenient way to pay when traveling overseas, but using the wrong card can add extra fees and complications to your purchase. Many credit cards charge as much as a 3% transaction fee for all international purchases. In addition, some issuers charge a fee if a purchase is processed by a bank outside the United States, even if you never leave your home. If you purchase something online from another country or purchase an airline ticket or hotel room with a foreign company, you could be charged a foreign transaction fee of up to 3%. Before you leave the country or order anything from a merchant that is not based in the United States, it is a good idea to call your issuer and ask about the foreign transaction fee. You can save yourself some money by using a credit card that doesn’t charge a fee for foreign transactions.

Photo by davipt

GOP Blocking Obama Pick to Head Consumer Protection Agency

The new Consumer Financial Protection Bureau has too much unfettered power and President Barack Obama’s choice to lead it will be blocked until the agency is made more accountable, Senate Republicans said Tuesday. At a Banking Committee confirmation hearing on Richard Cordray’s nomination, Republicans did not assail the credentials of the president’s pick, a former Ohio attorney general. Instead, they complained that the bureau’s director will have too much independence and said other federal financial regulators would be unable to curb the agency’s actions, even if its rulings threaten to cause instability in the banking system. GOP lawmakers from both chambers want several changes, including replacing the bureau’s director with a bipartisan commission, making it easier for other financial regulators to overrule the bureau and giving Congress direct power over the agency’s budget. Currently, the bureau gets its money from the Federal Reserve, of which it technically is a part.

LowCards.com Weekly Credit Card Rate Report

Based on the 1000+ cards in the LowCards.com Complete Credit Card Index, the average advertised APR for credit cards is 14.15%, a slight increase from 14.09% last week. Six months ago, the average was 14.25%. One year ago, the average was 13.70%.

Related Posts:

• None yet, check back soon!

Wells Fargo to Test $3 a Month Debit Fee

Yet another of the nation’s top banks is flirting with the idea of charging a monthly fee to customers who use debit cards. Wells Fargo said Tuesday it will start charging a $3 monthly fee for debit card usage to customers in Georgia, New Mexico, Nevada and Oregon beginning October 14.

Photo by TheTruthAbout

Credit Card Late Payments Hit 17-Year Low in Second Quarter

Credit card users are so focused on keeping their accounts in good standing that they’ve driven the rate of late payments down to its lowest level in 17 years. The National credit card delinquency rate, or rate of payments 90 days or more past due, fell to 0.60% in the second quarter, down from 0.92% a year ago. That’s the lowest rate since 1994, according to credit reporting agency TransUnion. Delinquencies were expected to drop, but the improvement in that April to June period was faster than forecast. And the improved payment habits came despite increased use of credit cards, reflected in a slight uptick in the amount of debt card users carried during the quarter.The average combined total debt for all major credit cards increased by $20 for the first three months of the year, to $4,699 per borrower. Even so, that amount is down more than 5% from the $4,951 average in the second quarter of 2010, and is 16% lower than the peak average debt of $5,575 in the first quarter of 2009.

Photo via debtcovered

Fed Survey Shows Consumers and Banks Still Cautious on Credit Cards

Credit card late payments and default rates continue to drop, and the Federal Reserve has pledged to keep interest rates at historic lows. But only a small percentage of banks have eased their lending standards on credit cards. In addition, banks report just a moderate increase in consumer demand for credit cards. These are the major credit card findings of the latest Senior Loan Officer Opinion Survey on Bank Lending Practices released by the Federal Reserve last Monday.

Bank of America Exiting International Credit Cards

Bank of America is exiting its international consumer card business, reaching a deal to sell the third unit this year and announcing plans to shed its much larger consumer credit card operations in the U.K. and Ireland. The nation’s biggest bank by assets said Monday it has reached an agreement to sell its $8.6 billion Canadian card portfolio to Toronto Dominion Bank for an undisclosed amount. Earlier this year, Bank of America reached deals to sell its Spanish card unit and a small business card unit in the U.K., and the bank said it now plans to shed other European card units because they aren’t core to Chief Executive Brian Moynihan’s plans.

Photo by Bravo Six Niner Delta

Capital One’s Recipe for Growth: Do Deals

Capital One Financial has found a way to grow despite the lingering hangover from the financial crisis. Its method: do deals. The unusual enthusiasm for its stock last week signals confidence that the young bank has found a strategy for the new banking order. The economy is recovering too slowly to allow banks to grow revenue solidly; the profitability and return on equity of U.S. banks might never return to what it was at the height of economic growth and the mortgage boom in the years before 2007. There are risks to both transactions: Customers could defect during the integration of ING Direct and take their deposits with them; ING Direct’s mortgage book could turn into a headache for Capital One, just as mortgages are causing pain at other big banks like Bank of America.

Photo by heyyouwakeup

Credit Card Customer Satisfaction Improves for a Second Year

Credit card customer satisfaction has increased for a second year, according to the J.D. Power and Associates 2011 Credit Card Satisfaction Study released Thursday. The study measures customer satisfaction in six factors: interaction; credit card terms; billing and payment process; rewards; benefits and services; and problem resolution. Overall credit card satisfaction averages 731 on a 1,000-point scale in 2011, up from 714 in 2010 and 705 in 2009. American Express ranks highest in customer satisfaction for a fifth consecutive year with a score of 786 doing well in the benefits and services, credit card terms and rewards factors. Discover Card was second with a score of 779, performing well in the interaction factor. Barclaycard ranks third with 739.

Facing Credit Card Debt, There is Hope–in War

Years of punishing recession and persistent highly unemployment rates have placed millions of Americans in places and situations they’d never dreamed of. For Jadiam Lopez, that place is a government complex in Ramadi, Iraq, about 60 miles west of Baghdad. After years of being unable to land a firefighter job near his home in Miami, Lopez took a job as a government contractor fighting fires in the war zone. Faced with mounting credit card debt and with a 3-year-old son to feed, Lopez, 31, made the difficult choice to leave home and head to the Middle East. The dual menace of credit card debt and unemployment has left many Americans looking for a way out; for Jadiam, the war has provided his financial escape route.

Photo by MSNBC

Bank of America Plans Big Layoffs to Cut Costs

Bank of America is set to eliminate at least 3,500 jobs in the coming months, as the beleaguered financial giant seeks to cut costs and restructure amid deepening shareholder dissatisfaction. With its stock down more than 50% since January, the job cuts by Bank of America may be only the start of a broader restructuring at the company, which is the nation’s largest bank. Brian Moynihan, the chief executive of the bank, has said that he hopes to trim quarterly expenses by $1.5 billion. Thousands more job cuts are likely in the months ahead.

Photo by forwardstl

LowCards.com Weekly Credit Card Rate Report

Based on the 1000+ cards in the LowCards.com Complete Credit Card Index, the average advertised APR for credit cards is 14.14%, a slight decrease from 14.15% last week. Six months ago, the average was 14.24%. One year ago, the average was 13.70%.

Related Posts:

• None yet, check back soon!

Brain wiring, behavioral quirks, and our early life experiences provide a new way of understanding our “money behavior.” The better you understand how you use money, how you think and feel about it, and how you organize it–or how it organizes you–the easier it is to figure out what is holding you back from having a more balanced attitude toward money.

Maggie Baker, Ph.D., a Philadelphia area financial psychological and author of Crazy About Money: How Emotions Confuse Our Money Choices and What to Do About It (Holistic Wealth Press, 2011, $14.95), has developed 10 “money types” which identify your unique relationship to money which are a part of your “financial self.”

Which type are you?

1. The Spendthrift: Enjoys spending money for immediate pleasure; has a hard time saving and prioritizing for the future.

2. The Stockpiler: Hoards money; carefully follows a budget in order to achieve financial goals.

3. The Indulger: Saves obsessively; then spends all of his/her savings in a flash without really knowing why.

4. The Spartan: Believes that the love of money is the root of all evil; self-esteem is derived from feeling superior to money and those who seek it.

5. The Eluder: Balancing a checkbook provides anxiety and tension. Avoiding the topic is this type’s course of action.

6. The Amasser: Self-worth is an extension of how much money they have accumulated.

7. The Gambler: Risk-takers who love the thrill of adventure; tends to throw their money around in the hope of winning big.

8. The Conserver: Determined to find the best value for their money no matter what it takes.

9. The Dealer: Loves showing his/her power and ability to get a better deal on whatever he/she buys.

10. The Risk Avoider: Hates financial surprises and setbacks; chooses safety and security in all things financial.

Once you’ve identified your “money type” or mixture of types, Baker believes it will help you develop the awareness and ability to effectively reflect and understand how you behave with money, and how money affects your self-esteem.

Baker states that the way we deal with money and the resulting emotions can interfere with rational decision-making processes. The impact of unacknowledged emotion on behavior and self-esteem is powerful and leaves people with little control over what is happening to them financially. By learning to experience emotions directly and reflect on them, we become more creative, solve problems more effectively, and feel better about ourselves.

“None of the money types are essentially good or bad; rather, each simply characterizes our attitude and behavior toward money. If our attitude or behavior is obsessive–too intense, too extreme, too rigid, or too destructive–it is time to examine your money type and behavior in depth,” says Baker.

For more information on “money types” or to purchase a copy of Crazy About Money: How Emotions Confuse Our Money Choices and What to Do About It, visit Amazon or maggiebakerphd.com.

Photo by brockney52

Related Posts:

• None yet, check back soon!

Hackers Shift to Small Firms

Hackers are expanding their sights beyond multinationals to include any business that stores data in electronic form. Small companies, which are making the leap to computerized systems and digital records, have now become hackers’ main target. With limited budgets and few or no technical experts on staff, small businesses generally have weak security. Cyber criminals have taken notice. In 2010, the U.S. Secret Service and Verizon’s forensic analysis unit, which investigates attacks, responded to a combined 761 data breaches, up from 141 in 2009. Of those, 482, or 63%, were at companies with 100 employees or fewer. Visa estimates about 95% of the credit card data breaches it discovers are on its smallest business customers. While credit card companies require all businesses that accept their cards to comply with their standards, known as PCI, they have few measures to enforce them for small businesses. Bob Russo, general manager of the PCI Council, says many small businesses neglect basic security measures such as changing default passwords.

Photo by onlinesalsa

Your Debt is Probably Growing Faster than the Government’s

Americans criticize the government leaders for running up the federal budget deficit, but do they practice what they preach? Not really. Individuals are living beyond their means at an even greater rate than the government is, based on recently released household-debt figures. U.S. household debt totaled $13.4 trillion at the end of 2010, or about 107% of the $12.5 trillion Americans earned in total household income last year, according to the Federal Reserve. The government’s total debt of $13.8 trillion represented about 94% of the $14.7 trillion in national income, or gross domestic product (GDP), last year.

Photo by Collection Agency

How the Debt Ceiling Talks Affect All Americans

Congress and President Obama have not reached a compromise on the debt ceiling, so the political drama continues. If the politicians can’t reach an agreement on the debt ceiling and budget issues, the nation could enter another “deep economic crisis” that would affect all Americans. Consequences could range from higher interest rates for all consumer loans, job furloughs, closed national parks and another blow to a fragile economy. The effects of a downgraded credit rating for the government are similar to a lower personal credit score. If the government has a lower credit score, every American will pay a higher price. Interest rates will increase for all consumer loans including college loans, auto loans, mortgages, and credit cards. This will be another tough blow that reduces income for households still trying to recover from the financial crisis of 2008. “Interest rates would skyrocket on credit cards, on mortgages and on car loans,” said President Obama on Monday.

Photo by joetta@sbcglobal.net

New Simplicity Card Aims to Minimize ‘Gotchas’

It’s a credit card that grants three wishes. But as attractive as the card’s features may sound, there are a few reasons to think twice before applying. Citigroup plans to launch a credit card that marries a trio or perks–no late fees, no penalty rate and a single interest rate for purchases, balance transfers and cash advances. The Simplicity card also doesn’t offer any rewards, which can be a deal breaker for some. Or it may turn out you won’t qualify for the card. Citi declined to specify what type of credit background is required. One of the biggest drawbacks is the card’s 16.99% interest rate. Customers who have the older version of the Simplicity card won’t automatically receive this new model. But cardholders can call customer service to see if they qualify for a switch.

Photo by Brian Crooks

Financial Tips for College-Bound Students

It is almost time for high school graduates to leave for college and take that first big step toward independence. Soon parents will discover how well they prepared their students to take care of themselves–can they wash their own clothes, cook for themselves and live on a budget? Talking with your son or daughter about money management, credit scores, and the dangers of debt should be part of these real world discussions. Managing money and the responsible use of credit is not something that just comes with age. These skills needs to be taught and they are some of the most valuable lessons we can teach our children. A few mistakes can cause real long-term damage to credit scores. If you co-signed on a credit card for your son or daughter, or have them on your account, their mistakes also become your mistakes.

Photo by onlinedegree7

Jumio Says Use Your Webcam to Swipe Credit Cards

Jumio, a secretive online payments startup created by Jajah founder Daniel Mattes, is finally ready for its close-up. There’s a fitting metaphor, because Jumio is enabling online credit card payments made by scanning a card with a computer webcam. Dubbed Netswipe, the technology allows online retailers to easily process a debit or credit card payment by having a user just hold up their card to their webcam. The video is encrypted and streamed to Jumio’s servers, which extract the card number and information and processes the payment. Jumio doesn’t just use optical character recognition to pull out the credit card number; instead it utilizes sophisticated computer vision to authenticate the card. For example, by analyzing the video stream, Jumio can confirm that it’s an actual card and not just a copy of a credit card. It can detect the raised lettering and can determine if it is plastic, or whether it appears to have metal inside.

LowCards.com Weekly Credit Card Rate Report

Based on the 1000+ cards in the LowCards.com Complete Credit Card Index, the average advertised APR for credit cards is 14.16%, slightly above last week’s average of 14.08%. Six months ago, the average was 13.79%. One year ago, the average was 13.67%.

Related Posts:

• None yet, check back soon!

More Credit Users Paying Bills On Time, Banks Seeing Profits

The nation’s top credit card companies are seeing a boost to their bottom lines as consumers are getting better about paying their bills on time. Five of the top six card issuers said the rates at which their customers defaulted on their accounts fell in June. Bank of America Corp. reported the biggest drop in defaults, with JPMorgan Chase & Co. and Discover Financial Services also showing significant improvement. The impact of the improved payment habits was reflected in the banks’ second-quarter financial results this week. Card holders are using their credit cards more. Citigroup said purchase volume rose 1.5%. JPMorgan Chase’s customers spent 10% more using their cards. Discover said sales volume on its namesake cards rose 9%.

Photo by debtcovered

When Your Doctor Sells Credit Cards

Should you finance your plastic surgery with plastic? Credit card issuers are stepping up their marketing of health care cards and lines of credit that help borrowers finance costly elective medical procedures. The cards, which typically boast initial interest rates of 0%, are targeted to clients of plastic surgeons, dentists and even veterinarians. Though they help some people pay for important procedures, the cards come with a number of drawbacks that may not be apparent at sign-up, including rates that can quickly spike. Some big firms are ramping up their offerings. Citigroup Inc. offers the Citi Health Card, while JPMorgan Chase & Co. pitches Chase Health Advance, a line of credit aimed at helping customers finance elective health procedures such as corrective eye surgery. For providers, the cards promise relief from billing headaches and the expense of wrangling cash from patients. The cards also can drive up business, since they allow patients to finance expensive elective procedures they might otherwise forgo. But for some patients, the cards can lead to medical-billing nightmares, according to Minnesota Attorney General Lori Swanson, who says that her office has seen a surge in complaints about the cards over the past year. Another problems, say consumer advocates, is that medical providers charge patients for the full cost of a procedure at the first visit even before multistage medical work is completed. If the patients are dissatisfied with their care, it is difficult to dispute since they already have been charged for it.

Photo by SpectrumHealth

Credit Card Issuers Paid Over $73 Million to Universities and Institutions in 2010

The number of credit cards issued to college students and alumni associations in 2010 dropped 17%, while the revenue that schools receive from the card issuers declined 13%. These are the results of a study released last week by the Federal Reserve. It shows the effects of one of the provisions of the CARD Act where credit card issuers are required to submit copies of all college credit card agreements. Issuers must also include the number of credit card accounts opened pursuant to the agreement, the amount of payments made by the issuer to the institution or organization during the year, and the number of new college credit card accounts that were opened during the year. Fewer cards means smaller payments to colleges. Issuers paid $73,261,906 to college institutions or college organizations in 2010. This represented a decrease of $11,200,859 or 13% versus year ago levels.

Photo by Student Finance Domain

Dodd-Frank Under Fire a Year Later

In the year since the passage of a sweeping overhaul of the nation’s financial regulatory system after the financial crisis, the stock market is up, banking profits have grown and institutions that invest on behalf of average Americans are praising the tougher stance in Washington. But there remain signs that the tightened regulatory measures could still be undone, creating uncertainty about whether the actions that have helped to stabilize Wall Street will be in place when the next crisis hits. Two dozen bills in Congress seek to dismantle parts of the Dodd-Frank Act, which President Obama signed a year ago. Business groups have argued that too many new regulations could snuff out the start of an economic recovery. Senate Republicans are refusing to consider nominations for posts at several financial regulatory agencies. Lawmakers have taken aim at agencies for budget cuts. Administration officials say that banking and business lobbyists have spent more than $50 million this year trying to change the law.

Photo by Leader Nancy Pelosi

Most Dodd-Frank Changes Still to Come

A year after the passage of sweeping financial reform, the biggest changes to the regulatory landscape are still to come. Already big financial institutions are grappling with new debit card swipe fee costs, higher deposit insurance fees and capital restrictions called for in the statute. Yet, the vast majority of changes–including structural alterations to big bank business models–are yet to come. According to a study by the international law firm of Davis Polk, as of July 1, regulators have completed only about 12% of the 400 rule-making requirements in Dodd-Frank, and further, 122 deadlines set in the statue for adopting key bank reform regulations and issuing studies have been missed.

Obama to Pick Former Ohio Attorney General for Post

President Barack Obama said he will nominate former Ohio Attorney General Richard Cordray to lead the Consumer Financial Protection Bureau, which opened Thursday amid continuing political fights about its scope. Elizabeth Warren developed the idea for the new agency and was appointed by Obama last fall to set it up. Warren’s prospects for becoming director of the bureau suffered a setback last year when Christopher Dodd, the Connecticut Democrat then in charge of the Senate Banking Committee, said she couldn’t win confirmation. Warren is a Harvard professor and will return to Harvard in the fall, according to a person briefed on her plans.

Visa, MasterCard Win Approval of Settlement in Anti-Steering Case

A federal judge has approved a settlement of alleged antitrust violations by Visa and MasterCard over rules they had in place preventing merchants from steering customers to lower-cost payment options. The agreement settles antitrust allegations brought by the U.S. government and several states over so-called anti-steering rules, which prohibited merchants that accept Visa and MasterCard credit cards from offering customers a discount for cash or a credit card that is less costly to the merchant. The rules also prohibited merchants from informing customers about transactions fees charged to the merchants in order to accept the cards. Under the settlement, Visa and MasterCard would allow merchants to offer discounts if they user alternate forms of payment, including other credit cards with lower merchant fees. A notice of the settlement was filed in October 2010 on the same day the U.S. Department of Justice brought its lawsuit. In reaching the deal, Visa and MasterCard didn’t admit or deny the allegations, according to court papers. The settlement is with the U.S. government, as well as 17 states.

Photo by Helcim

More Airline Credit Cards Introduced

If you are planning to book airline tickets, this is a good time to check out credit card offers. Competition continues to increase, and credit card issuers are using bonus miles and perks to attract new cardholders. Consumers can get free tickets, free checked bags, and free passes into the airport lounge. The current airline rewards are the hottest thing in the credit card industry in a long time. Two new offers came out this week that will increase competition to an already heavily contested category. These offers can be an easy way to get a little extra for using a credit card, but you have to do your homework to find the best offer for your personal spending habits and travel needs. The annual fee and interest rates vary for these cards. If you get the wrong card, you can pay too much for rewards that you may not use.

Photo by davipt

AMEX and Facebook Team Up on Deals

Card holders who link their account through a special app on AMEX’s Facebook page will receive discounts and special offers based on their listed interests and “Likes,” as well as the interests and “Likes” of their Facebook friends. Users of the new service don’t have to print coupons to redeem at a store. Instead, they load deals into the AMEX account by hitting an online button and then get the rewards when they swipe their card at purchase. In June, AMEX launched a program that allows users to redeem rewards point for Facebook ads. For every $6,750 spent, a card holders can receive $50 worth of Facebook advertising.

Photo by marcopako

LowCards.com Weekly Credit Card Rate Report

Based on the 1000+ cards in the LowCards.com Complete Credit Card Index, the average advertised APR for credit cards is 14.08%, slightly below last week’s average of 14.11%. Six months ago, the average was 13.76%. One year ago, the average was 13.68%.

Related Posts:

• None yet, check back soon!

Consumer Borrowing in U.S. Increases, Led by Credit Cards

Consumer borrowing in the U.S. rose in May for the eighth straight month, led by a boost in credit card use and student loans. Consumers may be ramping up credit card debt as gasoline prices and unemployment climb. At the same time, high fuel costs are probably keeping households from spending on big-ticket items like autos. Revolving debt, which includes credit cards, rose in May. It was the first gain this year and the biggest since June 2008.

Photo by debtcovered

Lenders Must Soon Give Reasons for Loan Rejections

Beginning July 21, consumers will get an explanation when they don’t receive the best interest rate or are turned down on a student loan, automobile loan or credit card application. This new regulation from the Federal Reserve and Federal Trade Commission requires lenders to send you a free copy of the credit score it used to arrive at its decision. The new Consumer Financial Protection Bureau will enforce these new rules. For the first time, consumers will get a clear understanding of how they are judged by lenders. The lender’s disclosure notice must provide the score and the factors that pulled down your score and where your score ranks nationally. It must give the major factors that decreased your score such as late payments or maxing out credit cards. It will also tell how to get a copy of your credit report.

Photo by welendcashhouston

We are All in Trouble if U.S. Defaults on Debt

If Uncle Sam defaults on his obligations, it would drive up the cost of borrowing for the federal government. Who wants to lend money at super-low rates to a deadbeat? The Treasury Department wouldn’t be the only one in trouble. Interest rates would skyrocket for everyone on mortgages, car loans, credit cards, home equity loans, and business loans. And, higher rates wouldn’t be the worst of it, economists and others warn.

How Frequent Fliers Exploit a Government Program to Get Free Trips

NPR recently reported on the government’s failed effort to persuade Americans to use dollar coins. But the coins have found at least one group of fans: travel enthusiasts who buy thousands of dollar coins with credit cards that award frequent flier miles for purchases. Once in possession of the coins–shipped to them by the government for free–they can deposit them into their bank accounts and pay off the credit card bills. The result: a free ticket to anywhere. Officials there first noticed something amiss in summer 2008, when they saw that a small number of customers were repeatedly ordering large numbers of one dollar coins. Another clue was that dollar coins were arriving in banks still clad in their U.S. Mint packaging. The Mint has sent letters to the top abusers and imposed a limit of 1,000 coins every ten days.

Photo by natural gas

Attractive Rewards Still Available or Prime Customers

Credit card issuers continue to sweeten the rewards, hoping to add consumers with excellent credit scores to their portfolios. The latest appealing offer is from Chase. The Southwest Airlines Rapid Rewards Premier credit card is now offering 50,000 points after your first purchase, enough for two free roundtrip flights to almost anywhere Southwest flies. There are some drawbacks to the card: a $99 annual fee, a higher APR (14.24%) and cardholders are probably required to have good to excellent credit scores to be granted approval. Issuers are becoming very competitive in attracting consumers with high credit scores, and they are using the best reward offers available in several years. There have been some great airline offers on the market during the first half of the year, but consumers need to be aware that many of these cards come with a higher interest rate. Like all reward cards, the benefits are a good deal only if you pay off your balance each month.

Photo by fisherbray

Hackers Break into Kiplinger Customer Database

Kiplinger Publications, which puts out personal finance magazines, said that hackers broke into its database and accessed information about 142,000 customers, including possibly 43,000 encrypted credit card numbers. The hack was discovered on June 25, and affected online subscribers as well as those who have print subscriptions, the company said in a statement.

Late Payments Plague Small Business

Nearly 40% of firms surveyed by the National Federation of Independent Business said “receivables” or money that customers owe, are coming in at a slower pace. Private businesses in the manufacturing, retail and wholesale industries are really feeling the pinch. On average, manufacturers with less than $10 million in annual revenue received payments 48 days out in 2011. That’s a six-day increase since 2010 and a 10-day rise since 2006. The delays affect cash flow, making it tough for small businesses to meet payroll, pay rent or buy supplies.

Photo by businessheroes

Consumer Agency Sets to Launch

The new Consumer Financial Protection Bureau will begin supervision of the nation’s largest banks next week and expects to subject the biggest of those firms to year-round supervision, the agency said. The CFPB, created by Congress as part of last year’s Dodd-Frank financial law, said it is preparing to dispatch examiners to more than 100 banks that together control 80% of the U.S. banking industry’s assets. The agency’s goals is to make sure banks aren’t engaging in discriminatory lending practices and that their products and services don’t put consumers at risk.

LowCards.com Weekly Credit Card Rate Report

Based on the 1000+ cards in the LowCards.com Complete Credit Card Index, the average advertised APR for credit cards is 14.11%, slightly above last week’s average of 14,01%. Six months ago, the average was 13.87%. One year ago, the average was 13.62%.

Related Posts:

• None yet, check back soon!

Discover Posts Record Net as Card Use Rises, Defaults Ease

Discover, the credit card issuer and payments network that outperformed three bigger rivals in the past year, posted a record second-quarter profit as consumers spent more and defaulted less. Interest income rose 1% to $1.57 billion from a year earlier, and credit card loans fell 1% to $45 billion, even as purchases made with Discover cards increased 9% to $25 billion, the firm said. The $401 million release from reserves to cover bad loans compared with $277 million in the same quarter last year, as overdue loans dropped to a 25-year low, Discover said. Net income for the three months ended May 31 more than doubled to $600 million.

Photo by TheTruthAbout

Fed Finalizes Debit Card Interchange Fees

After months of heated debate among lobbyists, bankers, retailers and politicians, the interchange fee on debit card transactions has now been finalized by the Federal Reserve. Currently, the interchange fee averages 44 cents per debit card transaction but recent reforms had proposed the fee be capped at 12 cents. On Wednesday, the Federal Reserve ruled that the fee will be 21 cents plus an additional amount to cover overall losses from fraud. The Fed made one other significant change: these rules will go into effect on October 1 rather than the planned July 21.

Photo by Helcim

Study: Credit Card Issuers Can Do More to Fight Fraud

That’s what consulting firm Javelin Strategy & Research said in a study released Tuesday that looks at the policies banks use to protect customer data. The study found that card companies do a good job resolving fraud problems once they occur. But they fall short on prevention and detection. When hackers can get consumer information through attacks like the recent breach at Citibank, they can then use what they have to mine more data from the web about those individuals. That makes it easier to send targeted emails to individuals that mimic messages from the bank–a process known as “spear phishing,” which takes the bogus email efforts known as “phishing” to the next level by incorporating personal information.

Photo by www.BackgroundNow.com

Citigroup Cites $2.7 Million in Customer Losses from Hack

Citigroup Inc. has told government officials that about 3,400 of the customers whose credit card information was hacked have suffered about $2.7 million in losses, according to the people familiar with the matter. The disclosure is the first acknowledged by the New York company that the May security breach resulted in any losses. Citigroup has previously indicated it would cover any losses, saying customers wouldn’t be liable for unauthorized use of their accounts in connection with the attack. Last week, Citigroup said 360,069 accounts were hacked, or 1.5% of its 23.5 million North American credit card accounts.

Photo by Center for Accessible Living

Five Ways to Protect Yourself From Credit Card Fraud

Bank of America may be facing problems modifying mortgages for struggling homeowners, but consumers with its credit cards can take comfort from this: the bank nabbed the best scores in an annual tally of card issuers’ efforts to combat identity fraud. Of the 23 credit issuers analyzed, Bank of America Corp. came out on top in all three categories–prevention, detection and resolution–to finish its fifth straight year as the best in class in Javelin Strategy & Research’s seven years of roundups. Banks face two other daunting challenges when credit card fraud occurs: customers abandon online banking, which means higher costs to the banks, or they switch banks, something one in five fraud victims do. Ultimately, of course, those extra costs to the banks are handed down to consumers. Here are five tips gleaned from the Javelin study to consider when choosing a new credit card.

Photo by Bravo Six Niner Delta

Chase Drops Pursuit of Bad Debt

J.P. Morgan Chase & Co. has abandoned more than a thousand debt-collection lawsuits across the U.S. that sought to recover soured credit card loans from borrowers. The nation’s second-largest bank by assets, including more than $100 billion in credit card accounts, wouldn’t disclose the number of cases dismissed or the reasons for the move. State judges said the bank has dropped lawsuits targeting borrowers in California, Florida, Illinois, New Jersey and New York since April.

Photo by Neubie

LowCards.com Weekly Credit Card Rate Report

Based on the 1000+ cards in the LowCards.com Complete Credit Card Index, the average advertised APR for credit cards is 13.95%, the same as last week’s average. Six months ago, the average was 13.81%. One year ago, the average was 13.63%.

Related Posts:

• None yet, check back soon!