I hear ya'. I can't wait to get our other car paid off myself. Brand new car payments can be a killer. Next to massive credit card debt, your car payment can be the cause of you falling into debt. At the time my wife and I bought our last two cars we were completely debt free other than our mortgage and I can probably trace back that the combined car payments of $1,300 may possibly have been the beginning of our current financial situation.
We did pay my car off in two years, but the remaining $600+ on my wife's car is driving me nuts. Not even can car payments be overwhelming you have to think about registration fees, insurance and maintenance. If you have a big car like my wife and I have, you will easily pay $50 or more in gas a week. With gas prices going up again filling up can be just as much a killer as the payment itself.
There are times I have thought of selling one car and us just getting by on the other. But with the one car paid off, we would really only be saving the subsequent costs. However, if you have trouble with your finances, selling one of your cars may help you significantly.
Another option you may not know about is that it usually is easier to refinance a car than it is to refinance a mortgage, especially, these days. One difference is there isn't an appraisal fee on an auto loan like a home loan and usually there are no other fees other than transfer of title fee, which usually runs about $20. If you think this option might work for you, the first thing you need to do is check the the Kelly Blue Book value. You can do this at your local library or on the Internet at http://www.kbb.com/. If you owe less than it's worth, you have a good chance you will be able to refinance your car loan, but if your credit is shaky that could be a problem. If you are upside and your credit is less than stellar, you should ask your creditor if they would be willing to reduce your interest rate or extend the payment terms. If your credit is good and you have equity in your car, shop around for the best loan. Credit unions usually have the best rates for car loans and a several online lenders. Check out BankRate.com for the best rates nationally and in your area.
For me, only one more year and our second car will be paid off. After that I would like a breather from car payments.
[This post is written and copyrighted by Financial Elite (http://financialelite.blogspot.com/ ).] Did you enjoy reading this article? You can receive free full-text articles from Financial Elite by RSS in your email inbox daily by entering your email HERE. Your email will only be used for this daily subscription, and each email will include a link you may use to unsubscribe at any time. Also follow us on Twitter.
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Showing posts with label credit card. Show all posts
Showing posts with label credit card. Show all posts
Saturday, February 12, 2011
Tuesday, February 8, 2011
If You Think 29.9% is Bad, Try 79.9%
From Blake Ellis at CNNMoney.com: My credit card had a 79.9% APR
Toni Riss had a credit card with a 79.9% interest rate.
"I had an accident on a motorcycle, went through bankruptcy to pay for medical expenses and my credit went to hell in a hand basket, so I was looking for credit cards for people with bad credit." Riss said.
"I about had a heart attack when I got a disclosure notice saying that my starting rate of 29.9% was going up to 79.9%," said Riss. "It was ludicrous. talk about a highway robbery."
[Yes], that rate is completely legal. The Card Act, which was passed in late 2009 to protect consumers from predatory lenders, only prevents issuers from raising rates retroactively. Credit card issuers are free to charge whatever rate they want at the front end.
I have thought of applying for a card with First Premier myself, but I have decided to stay with my no credit card policy. No matter what the limit or the interest rate. It's the best way to stay out of trouble.
Did you enjoy reading this article? You can receive free full-text articles from Financial Elite by RSS in your email inbox daily by entering your email HERE. Your email will only be used for this daily subscription, and each email will include a link you may use to unsubscribe at any time. Also follow us on Twitter.
Toni Riss had a credit card with a 79.9% interest rate.
"I had an accident on a motorcycle, went through bankruptcy to pay for medical expenses and my credit went to hell in a hand basket, so I was looking for credit cards for people with bad credit." Riss said.
"I about had a heart attack when I got a disclosure notice saying that my starting rate of 29.9% was going up to 79.9%," said Riss. "It was ludicrous. talk about a highway robbery."
[Yes], that rate is completely legal. The Card Act, which was passed in late 2009 to protect consumers from predatory lenders, only prevents issuers from raising rates retroactively. Credit card issuers are free to charge whatever rate they want at the front end.
I have thought of applying for a card with First Premier myself, but I have decided to stay with my no credit card policy. No matter what the limit or the interest rate. It's the best way to stay out of trouble.
Did you enjoy reading this article? You can receive free full-text articles from Financial Elite by RSS in your email inbox daily by entering your email HERE. Your email will only be used for this daily subscription, and each email will include a link you may use to unsubscribe at any time. Also follow us on Twitter.
Tuesday, April 20, 2010
Financial Re-Cap of Last Weeks: The Good, The Bad, and The Ugly
[This post is written and copyrighted by Financial Elite (http://financialelite.blogspot.com/ ).]
Here's a quick re-cap Clint Eastwood style of last weeks challenges with debt.
The Good: My wife and I have begun looking into reducing our utility bills as much as possible. So my wife had called our cable provider and was able to get our bill reduced by $17. It's not a whole lot, but $17 is $17. That's a savings of $204 a year that can go towards debt or savings.
The Bad: I received an offer from Bank of America to settle one of my credit cards. It was the last card that I had put on their balance liquidation program and thought what the heck was going on. I had immediately called them, but they were closed for the day. The following business day they beat me to the punch and called me instead.
Apparently, the offer had crossed in the mail. The counselor told me I could take the offer, but I declined and preferred to stick the BLP plan. They had called to set me up on an automatic payment plan for this card. My other cards are set up for auto pay, which is a requirement to be on the plan. Typically, you need to be on the auto payment plan for 6 to 12 months depending on the bank you are with.
What had turned out to be what I thought was going to bad actually turned out to be good. The counselor had told me after my next payment on my other cards they would report me as current. I still have 3 more on the last card before they report me up to date. I am definitely on my way to be back on track.
The Ugly: As my wife had posted a few days ago we had received a collection notice for a medical bill. My wife called National Enterprise Systems to make arrangements to make payments on the bill, but they would have nothing to do with payments.
They offered her to settle for $2,700, which was about $700 less then then original bill or that we had to pay $1,000 before they would talk a payment plan. So for now I guess they get nothing.
These collection companies are so dumb. We are willing to pay back the entire amount, but they don't want it. So until they wise up they can just suck it.
We Also Suggest:
Here's a quick re-cap Clint Eastwood style of last weeks challenges with debt.
The Good: My wife and I have begun looking into reducing our utility bills as much as possible. So my wife had called our cable provider and was able to get our bill reduced by $17. It's not a whole lot, but $17 is $17. That's a savings of $204 a year that can go towards debt or savings.
The Bad: I received an offer from Bank of America to settle one of my credit cards. It was the last card that I had put on their balance liquidation program and thought what the heck was going on. I had immediately called them, but they were closed for the day. The following business day they beat me to the punch and called me instead.
Apparently, the offer had crossed in the mail. The counselor told me I could take the offer, but I declined and preferred to stick the BLP plan. They had called to set me up on an automatic payment plan for this card. My other cards are set up for auto pay, which is a requirement to be on the plan. Typically, you need to be on the auto payment plan for 6 to 12 months depending on the bank you are with.
What had turned out to be what I thought was going to bad actually turned out to be good. The counselor had told me after my next payment on my other cards they would report me as current. I still have 3 more on the last card before they report me up to date. I am definitely on my way to be back on track.
The Ugly: As my wife had posted a few days ago we had received a collection notice for a medical bill. My wife called National Enterprise Systems to make arrangements to make payments on the bill, but they would have nothing to do with payments.
They offered her to settle for $2,700, which was about $700 less then then original bill or that we had to pay $1,000 before they would talk a payment plan. So for now I guess they get nothing.
These collection companies are so dumb. We are willing to pay back the entire amount, but they don't want it. So until they wise up they can just suck it.
We Also Suggest:
- Bank of America's Balance Liquidation Program (BLP) Still Sucks
- What's the Best Way to Pay off My Credit Card Debt If I Have a High FICO Credit Score ?
- How did This Economic Crisis Start?
- Should I Use My 401K to Pay Off My Mortgage?
- Should I Take Out a 401K Loan to Pay Off My Credit Cards?
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Sunday, June 7, 2009
Financial Motivational Quote June 7, 2009
"Life was a lot simpler when what we honored was father and mother rather than all major credit cards."- Robert Orben
Tuesday, May 26, 2009
Obama Makes The Credit Card Smackdown A Reality
Last Tuesday the Senate voted 90-5 to approve the bill that makes it tougher for credit card companies to raise fees and interest rates starting in the first quarter next year.
"To have the industry reaching and be as abusive to consumers, it needed to stop and it needed to change," said Senator Chris Dodd, a bill sponsor.
The bill targets credit card rate hikes and excessive fees."The President has created a strong impetus for immediate action, "said Travis Plunkett with the Consumer Federation of America.
President Obama signed the bill on Friday making it tougher for credit card companies to raise fees and interest rates.
The new law was a culmination of several years of work by consumers groups and Democrats to rein in what they say are abusive practices that prey on consumers. During the bill signing ceremony President Obama praised the new law.
Starting in February 2010 the bill will put a stop to:
- Charging consumers to pay by phone
- Sudden surges in interest rates
The bill also makes changes to:
- Applying payments made over the minimum due to balances with the highest interest rates first.
- Information in tiny print must be made clearer.
- Let consumers know how long it would take to payoff a balance if they only pay the minimum payment.
Credit card companies have been raising fees and interest rates. From November 2008 to February 2009, rates increased from an average of 12.02% to 13.08%. Because of this people have not been able to make their payments on their credit cards and are walking away from the debt.
President Obama stated the bill is not designed to protect those who are financially irresponsible, and that credit card companies do deserve to make a profit.
"We do not excuse those, and do not condone folks who have acted irresponsibly," he said.
Although, the bill is now law it doesn't go into effect until February 2010. Watch out for credit card companies trying to raise rates and charge as many fees as they can before the bill goes into effective.
President Obama Signs New Credit Card Bill Into Law
Everyone Has a Credit Card Horror Story
"To have the industry reaching and be as abusive to consumers, it needed to stop and it needed to change," said Senator Chris Dodd, a bill sponsor.
The bill targets credit card rate hikes and excessive fees."The President has created a strong impetus for immediate action, "said Travis Plunkett with the Consumer Federation of America.
President Obama signed the bill on Friday making it tougher for credit card companies to raise fees and interest rates.
The new law was a culmination of several years of work by consumers groups and Democrats to rein in what they say are abusive practices that prey on consumers. During the bill signing ceremony President Obama praised the new law.
Starting in February 2010 the bill will put a stop to:
- Charging consumers to pay by phone
- Sudden surges in interest rates
The bill also makes changes to:
- Applying payments made over the minimum due to balances with the highest interest rates first.
- Information in tiny print must be made clearer.
- Let consumers know how long it would take to payoff a balance if they only pay the minimum payment.
Credit card companies have been raising fees and interest rates. From November 2008 to February 2009, rates increased from an average of 12.02% to 13.08%. Because of this people have not been able to make their payments on their credit cards and are walking away from the debt.
President Obama stated the bill is not designed to protect those who are financially irresponsible, and that credit card companies do deserve to make a profit.
"We do not excuse those, and do not condone folks who have acted irresponsibly," he said.
Although, the bill is now law it doesn't go into effect until February 2010. Watch out for credit card companies trying to raise rates and charge as many fees as they can before the bill goes into effective.
President Obama Signs New Credit Card Bill Into Law
Everyone Has a Credit Card Horror Story
Sunday, May 24, 2009
President Obama Signs New Credit Card Bill Into Law
President Obama signed the U.S. Credit Card Accountability Responsibility and Disclosure (CARD) Act of 2009 on Friday.
"Our business is changing," said Bank of America's Global Card Services President Ric Struthers,"It is changing partly because of the new law, but more importantly because customers are changing. They want rates and fess to be fair and to remain consistent. They want to be able to read and understand the terms and conditions of their credit card agreements. They want to be informed and know what it costs them to use a credit card. We completely agree."
Similar to regulations passed by the Federal reserve late last year, he new legislation restricts credit issuers; ability to price customers to reflect their individual risk, changes the way payments are applied to customer accounts and requires new disclosures. The majority of the provisions in the law became effective next February.
Some key provisions in the new law include:
- Prohibiting over limit fees unless the customer opts in to being allowed to go over the limit.
- Allocating payment amounts above the required minimum only to the highest rate balances first.
- Prohibiting rate increases on existing balances except in limited circumstances, including when cardholder payment is at least 60 days past due.
- Requiring statement disclosures that indicate how long it would take to pay off a balance if the customer only pays the minimum each month.
- Ensuring young people under 21 have a cosigner or are able to demonstrate financial ability to repay the loan before they are issued a credit card account.
"While there will be a significant impact to the card business," said Struthers, "ours goals remain the same: to responsibly lend to the broadcast number of customers possible, while protecting the safety and soundness of our company, and providing an appropriate return to our shareholders."
In the fourth quarter last year, Bank of America extended $8 billion of unsecured consumer credit and loan another $6 billion in the first quarter of this year.
"The payments business, including credit cards , is here to stay," Struthers said.
in 2008, U.S. cardholders charged more than $2 trillion in total volume, 14 percent of the U.S. gross domestic product.
"The credit card is embedded in our financial system," he concluded.
Should I Stop Contributing To My 401K If I Want To Pay Off My Credit Cards?
I Haven't Paid My Credit Card Bills In Years. Why Am I Being Told I Still Owe Money?
Can Credit Card Companies And Collectors Harass Me at Work?
Everyone Has a Credit Card Horror Story
"Our business is changing," said Bank of America's Global Card Services President Ric Struthers,"It is changing partly because of the new law, but more importantly because customers are changing. They want rates and fess to be fair and to remain consistent. They want to be able to read and understand the terms and conditions of their credit card agreements. They want to be informed and know what it costs them to use a credit card. We completely agree."
Similar to regulations passed by the Federal reserve late last year, he new legislation restricts credit issuers; ability to price customers to reflect their individual risk, changes the way payments are applied to customer accounts and requires new disclosures. The majority of the provisions in the law became effective next February.
Some key provisions in the new law include:
- Prohibiting over limit fees unless the customer opts in to being allowed to go over the limit.
- Allocating payment amounts above the required minimum only to the highest rate balances first.
- Prohibiting rate increases on existing balances except in limited circumstances, including when cardholder payment is at least 60 days past due.
- Requiring statement disclosures that indicate how long it would take to pay off a balance if the customer only pays the minimum each month.
- Ensuring young people under 21 have a cosigner or are able to demonstrate financial ability to repay the loan before they are issued a credit card account.
"While there will be a significant impact to the card business," said Struthers, "ours goals remain the same: to responsibly lend to the broadcast number of customers possible, while protecting the safety and soundness of our company, and providing an appropriate return to our shareholders."
In the fourth quarter last year, Bank of America extended $8 billion of unsecured consumer credit and loan another $6 billion in the first quarter of this year.
"The payments business, including credit cards , is here to stay," Struthers said.
in 2008, U.S. cardholders charged more than $2 trillion in total volume, 14 percent of the U.S. gross domestic product.
"The credit card is embedded in our financial system," he concluded.
Should I Stop Contributing To My 401K If I Want To Pay Off My Credit Cards?
I Haven't Paid My Credit Card Bills In Years. Why Am I Being Told I Still Owe Money?
Can Credit Card Companies And Collectors Harass Me at Work?
Everyone Has a Credit Card Horror Story
Friday, May 22, 2009
Be Careful When Transferring Your Balance To A Lower Interest Rate Credit Card
I love reading articles from Gerri Willis, CNN personal finance editor and author of the book "Home Rich: Increasing the Value of the Biggest Investment of Your Life". Mainly because she has the same view on personal finance that we do.
We've discussed many time at being aware of the possible cost, higher interest rates, and excessive fees when you apply for a balance transfer with a new credit card.
Most people now the term APR (annual percentage rate) but the number of credit card holders should really pay attention to "effective APR."
"An effective APR represents your total cost of credit. Now, keep in mind, this may be more than just an interest rate. If you are paying an annual fee, if you incurred a balance transfer when transferring the balance to that card...those are costs that will add to the interest rate that you're effectively paying, effectively raising the cost that you pay on that balance." says Greg McBride, senior financial analyst at bankrate.com.
Gerri suggests to beware of:
- Introductory rates
- Payment schedules
- Cash advance fees
- Late Fees
- Default rates
Be sure you crunch the numbers when determining the best credit card for you.You can manage these expenses very easily by following these simple rules: make your payments on time, keep an eye on your rate schedule and avoid cash advances whenever possible.
We've discussed many time at being aware of the possible cost, higher interest rates, and excessive fees when you apply for a balance transfer with a new credit card.
Most people now the term APR (annual percentage rate) but the number of credit card holders should really pay attention to "effective APR."
"An effective APR represents your total cost of credit. Now, keep in mind, this may be more than just an interest rate. If you are paying an annual fee, if you incurred a balance transfer when transferring the balance to that card...those are costs that will add to the interest rate that you're effectively paying, effectively raising the cost that you pay on that balance." says Greg McBride, senior financial analyst at bankrate.com.
Gerri suggests to beware of:
- Introductory rates
- Payment schedules
- Cash advance fees
- Late Fees
- Default rates
Be sure you crunch the numbers when determining the best credit card for you.You can manage these expenses very easily by following these simple rules: make your payments on time, keep an eye on your rate schedule and avoid cash advances whenever possible.
Saturday, May 16, 2009
Bank of America To Sell China Construction Bank Stock To Raise Capital
With the new stress test results out, many banks are in need to to raise capital. Bank of America, which is required to raise 34 billion, has begun doing just that.
Bank of America has decided to reduce its stake in China Construction Bank (CCB) to 10.95% to help strengthen Bank of America's capital levels while still allowing the company to remain a long term partner with CCB.
"In our view, the cooperation between the two banks has been very successful," said Greg Curl, Bank of America Global Corporate Strategy and Planning Executive." I am pleased with the progress we have achieved with our partner. We intend to remain long term, strategic partner with CCB and maintain our ownership at or above 10 percent."
China Construction Bank is the leading commercial bank in China and consists of three principal business segments: corporate banking, personal banking and treasury operations.
Under the Strategic Assistance Agreement with CCB, Bank of America experts assist CCB with risk management, governance, bank cards, consumer banking, information technology, human resources and treasury services. Since October 2005, more than 850 teammates from across Bank of America have contributed talent to more than 100 Shared Experience Sessions, 54 collaborative and advisory projects and 36 training sessions.
The strategic agreement has also provided Bank of America associates with more than 320,000 hours of international experience through their work with CCB.
Bank of America sold 13.5 billion shares in CCB or 5.78percent to an investment consortium this week. The proceeds from the sale, after adjusting for the cost of the original investment and applicable taxes, will bolster Bank of America's common capital levels, Bank of America remains the second largest shareholder in CCB.
Bank of America has decided to reduce its stake in China Construction Bank (CCB) to 10.95% to help strengthen Bank of America's capital levels while still allowing the company to remain a long term partner with CCB.
"In our view, the cooperation between the two banks has been very successful," said Greg Curl, Bank of America Global Corporate Strategy and Planning Executive." I am pleased with the progress we have achieved with our partner. We intend to remain long term, strategic partner with CCB and maintain our ownership at or above 10 percent."
China Construction Bank is the leading commercial bank in China and consists of three principal business segments: corporate banking, personal banking and treasury operations.
Under the Strategic Assistance Agreement with CCB, Bank of America experts assist CCB with risk management, governance, bank cards, consumer banking, information technology, human resources and treasury services. Since October 2005, more than 850 teammates from across Bank of America have contributed talent to more than 100 Shared Experience Sessions, 54 collaborative and advisory projects and 36 training sessions.
The strategic agreement has also provided Bank of America associates with more than 320,000 hours of international experience through their work with CCB.
Bank of America sold 13.5 billion shares in CCB or 5.78percent to an investment consortium this week. The proceeds from the sale, after adjusting for the cost of the original investment and applicable taxes, will bolster Bank of America's common capital levels, Bank of America remains the second largest shareholder in CCB.
Wednesday, May 13, 2009
Where To Find The Best Credit Cards
Finding the best credit cards can be confusing, but here is what we found on CNNMoney recently. Picks that offer great perks to suit your spending habits.
1. Balance Transfers
The Card: iberiaBank Visa Classic
Website: creditcardsiberiabank.com
Rate: 6.25%-8.25%
This card offers zero interest on balance transfers for six months- and there is no balance transfer fee.
2. A little cash back
The Card: Schwab Bank Invest First Visa
Website: Schwab.com
Rate: 13.99%
Earn 2% unlimited cash back on every single purchase you make. You must have a Schwab One brokerage account, but there are no fees to open or maintain it.
3. A lot of cash back
The Card: Blue Cash from American Express
Website: americanexpress.com
Rate: starts at 7.99% plus prime
Charge at least $6,500 a year, and your cash-back percentage zooms from 1% to 5% on purchases at gas stations, supermarkets, and drugstores, and from 0.5% to 1.5% on everything else.
4. Cash at the pump
The Card: Pentagon Federal Visa Platinum
Website: penfed.org
Rate: 13.99%
Get 5% unlimited cash back at the pump, plus 2% on supermarket purchases and 1.25% on everything else. You must join a credit union to get the card.
5. Travel Miles
The Card: Escape by Discover
Website: discovercard.com
Rate:10.99% to 18.99%
Earn two miles for every dollar spent, plus 1,000 bonus miles each month you make a purchase for the first 12 months. Drawback: a $60 annual fee.
1. Balance Transfers
The Card: iberiaBank Visa Classic
Website: creditcardsiberiabank.com
Rate: 6.25%-8.25%
This card offers zero interest on balance transfers for six months- and there is no balance transfer fee.
2. A little cash back
The Card: Schwab Bank Invest First Visa
Website: Schwab.com
Rate: 13.99%
Earn 2% unlimited cash back on every single purchase you make. You must have a Schwab One brokerage account, but there are no fees to open or maintain it.
3. A lot of cash back
The Card: Blue Cash from American Express
Website: americanexpress.com
Rate: starts at 7.99% plus prime
Charge at least $6,500 a year, and your cash-back percentage zooms from 1% to 5% on purchases at gas stations, supermarkets, and drugstores, and from 0.5% to 1.5% on everything else.
4. Cash at the pump
The Card: Pentagon Federal Visa Platinum
Website: penfed.org
Rate: 13.99%
Get 5% unlimited cash back at the pump, plus 2% on supermarket purchases and 1.25% on everything else. You must join a credit union to get the card.
5. Travel Miles
The Card: Escape by Discover
Website: discovercard.com
Rate:10.99% to 18.99%
Earn two miles for every dollar spent, plus 1,000 bonus miles each month you make a purchase for the first 12 months. Drawback: a $60 annual fee.
Senate deal on credit cards slows!
The smack down on credit card companies had grown very popular and President Obama has stated that he would like to have the bill on his desk by Memorial Day. The Senate's new bill is tougher than a similar bill passed in the House last month. The Senate bill still faces possible amendments and could change further.
The current Senate Bill would:
- Go into effect nine months after passage, which is sooner than the House bill.
- Ban gift card issuers from charging "dormancy fees" on cards redeemed too late: the House bill doesn't address gift cards
- Prevent those under 21 from getting a credit card unless they can prove they have an income stream to pay off debt or have their parent's signature; the House bill places less onerous restrictions on those under 18.
- Allow credit card issuers to raise fees if a consumer is 60 days late on a payment, the House bill and Federal Reserve rules allow fee hikes after payment is 30days late.
Credit card industry advocates caution that the Senate bill won't be the final word on the issue, and they plan to fight some of the provisions.
"We have serious concerns with the Senate bill, and we oppose any amendments to the bill," Scott Talbott, a lobbyist for the Financial Services Roundtable, an industry group.
At the rate things are moving it will end up being next year July before this gets done. That's when the original bill was scheduled to go into action. If you think this is the right thing to do, press to have this bill passed.
The current Senate Bill would:
- Go into effect nine months after passage, which is sooner than the House bill.
- Ban gift card issuers from charging "dormancy fees" on cards redeemed too late: the House bill doesn't address gift cards
- Prevent those under 21 from getting a credit card unless they can prove they have an income stream to pay off debt or have their parent's signature; the House bill places less onerous restrictions on those under 18.
- Allow credit card issuers to raise fees if a consumer is 60 days late on a payment, the House bill and Federal Reserve rules allow fee hikes after payment is 30days late.
Credit card industry advocates caution that the Senate bill won't be the final word on the issue, and they plan to fight some of the provisions.
"We have serious concerns with the Senate bill, and we oppose any amendments to the bill," Scott Talbott, a lobbyist for the Financial Services Roundtable, an industry group.
At the rate things are moving it will end up being next year July before this gets done. That's when the original bill was scheduled to go into action. If you think this is the right thing to do, press to have this bill passed.
Thursday, April 30, 2009
10 Things Credit Card Companies Don't Want You To Know. Part 9 0f 10
April has been Credit Card Question and Answer month here at Financial Elite. We continue with Part 10 with information provided from an article from SmartMoney about the little known rules that are costing you money and putting your credit, your identity and your family at risk.
Think your credit card transaction will be declined if you go over your limit? Think again. If you do go over your limit you have regret having done so. It could raise credit card interest rate sky high.
Many people learn the hard way when they go over their credit card limit and their interest rates sky rocket to 29%. An event like this, among others, can push you into credit counseling and into a debt-management plan.
Keeping you in the hole forever, banks may continue to charge an over limit fee against maxed out credit cardholders. A penalty of $30 every month your credit card balance remains over the credit limit. A lot of credit cardholders will deal with the fee rather than the embarrassment of being declined.
Over limit fees can simply be another way for banks to make money at the expense of the unknowing consumer.
If banks are willing to allow charges over the limit then they should accept he profit that comes from the increased interest rate charges and be satisfied with that.
Think your credit card transaction will be declined if you go over your limit? Think again. If you do go over your limit you have regret having done so. It could raise credit card interest rate sky high.
Many people learn the hard way when they go over their credit card limit and their interest rates sky rocket to 29%. An event like this, among others, can push you into credit counseling and into a debt-management plan.
Keeping you in the hole forever, banks may continue to charge an over limit fee against maxed out credit cardholders. A penalty of $30 every month your credit card balance remains over the credit limit. A lot of credit cardholders will deal with the fee rather than the embarrassment of being declined.
Over limit fees can simply be another way for banks to make money at the expense of the unknowing consumer.
If banks are willing to allow charges over the limit then they should accept he profit that comes from the increased interest rate charges and be satisfied with that.
10 Things Credit Card Companies Don't Want You To Know. Part 9 0f 10
April has been Credit Card Question and Answer month here at Financial Elite. We continue with Part 9 with information provided from an article from SmartMoney about the little known rules that are costing you money and putting your credit, your identity and your family at risk.
A credit card with great incentives, a low interest rate and just the right mix of perks and fees that are the just the right fit for you might be what you think you have, but looks can be deceiving. The credit card company can change the terms of your Utopia credit card agreement at any time.
Consumer groups report this is a sore spot with credit cardholders, and with good cause. many lenders and credit card companies defend this practice saying things like, "A credit purchase is an unsecured loan. It's the riskiest sort of lending we do, which is why it's expensive. The banks are protecting themselves."
Unhappy credit cardholders will almost always seek alternatives and credit card lending is a highly competitive market.
How do you protect yourself from having the wool pulled over your eyes? Be vigilant and pay attention to all the mail you get from your credit card company. even if it looks like junk mail.
A credit card with great incentives, a low interest rate and just the right mix of perks and fees that are the just the right fit for you might be what you think you have, but looks can be deceiving. The credit card company can change the terms of your Utopia credit card agreement at any time.
Consumer groups report this is a sore spot with credit cardholders, and with good cause. many lenders and credit card companies defend this practice saying things like, "A credit purchase is an unsecured loan. It's the riskiest sort of lending we do, which is why it's expensive. The banks are protecting themselves."
Unhappy credit cardholders will almost always seek alternatives and credit card lending is a highly competitive market.
How do you protect yourself from having the wool pulled over your eyes? Be vigilant and pay attention to all the mail you get from your credit card company. even if it looks like junk mail.
Wednesday, April 29, 2009
10 Things Credit Card Companies Don't Want You To Know. Part 8 0f 10
April has been Credit Card Question and Answer month here at Financial Elite. We continue with Part 8 with information provided from an article from SmartMoney about the little known rules that are costing you money and putting your credit, your identity and your family at risk.
Credit card statements are crystal clear about what day your payment is due, but they're not so forthcoming about what time on that due date. Some banks have triggered consumer complaints by setting a 9 a.m. deadline on the posted payment date- which is before the mail arrives.
Chi Chi Wu, an attorney with the National Consumer Law Center, says a number of class-action lawsuits have succeeded in getting most banks to push back their payment deadline to 2 p.m., the traditional bankers closing hour, a time by which most mail delivery is complete. Even so, a spokeswoman for the American Bankers Association is unsympathetic, saying bills are due upon receipt and that banks spend a lot of money giving consumers options such as paying via phone, online, or auto bill pay. She does not understand why it's an issue to pay your bills on time, it's very easy.
You have to admit she has a point: If you cannot allow time for the U.S. mail delivery, you can always take advantage of an online or pay by phone option and if you are really in a pinch you can always overnight your payment via Fed Ex or UPS delivery, its worth it to avoid a late payment.
Credit card statements are crystal clear about what day your payment is due, but they're not so forthcoming about what time on that due date. Some banks have triggered consumer complaints by setting a 9 a.m. deadline on the posted payment date- which is before the mail arrives.
Chi Chi Wu, an attorney with the National Consumer Law Center, says a number of class-action lawsuits have succeeded in getting most banks to push back their payment deadline to 2 p.m., the traditional bankers closing hour, a time by which most mail delivery is complete. Even so, a spokeswoman for the American Bankers Association is unsympathetic, saying bills are due upon receipt and that banks spend a lot of money giving consumers options such as paying via phone, online, or auto bill pay. She does not understand why it's an issue to pay your bills on time, it's very easy.
You have to admit she has a point: If you cannot allow time for the U.S. mail delivery, you can always take advantage of an online or pay by phone option and if you are really in a pinch you can always overnight your payment via Fed Ex or UPS delivery, its worth it to avoid a late payment.
10 Things Credit Card Companies Don't Want You To Know. Part 7 0f 10
April has been Credit Card Question and Answer month here at Financial Elite. We continue with Part 7 with information provided from an article from SmartMoney about the little known rules that are costing you money and putting your credit, your identity and your family at risk.
Remember travelers checks? Yes, I know those are a blast from the past- and now days credit cards has pretty much replaced travelers checks as the preferred method for making purchases abroad. Credit cards are widely accepted overseas, and they can be used in ATM's all over the world to dispense cash in the currency of whatever country you may be visiting at the time, making it very convenient. But buyer beware of hidden charges. Some banks have recently raised the rates on currency conversion from 1% to 3%. On top of that, ATM usage has its own fees attached.
Consumers Union recommends studying your credit cards' policies on foreign currency purchases before you leave home, then adjusting your spending accordingly. Credit cards issued by smaller banks may have lower fees, as do certain brand-name cards. American Express, which has long positioned itself as a card for travelers, charges a flat 2%.
Remember travelers checks? Yes, I know those are a blast from the past- and now days credit cards has pretty much replaced travelers checks as the preferred method for making purchases abroad. Credit cards are widely accepted overseas, and they can be used in ATM's all over the world to dispense cash in the currency of whatever country you may be visiting at the time, making it very convenient. But buyer beware of hidden charges. Some banks have recently raised the rates on currency conversion from 1% to 3%. On top of that, ATM usage has its own fees attached.
Consumers Union recommends studying your credit cards' policies on foreign currency purchases before you leave home, then adjusting your spending accordingly. Credit cards issued by smaller banks may have lower fees, as do certain brand-name cards. American Express, which has long positioned itself as a card for travelers, charges a flat 2%.
Tuesday, April 28, 2009
10 Things Credit Card Companies Don't Want You To Know. Part 6 0f 10
April has been Credit Card Question and Answer month here at Financial Elite. We continue with Part 6 with information provided from an article from SmartMoney about the little known rules that are costing you money and putting your credit, your identity and your family at risk.
Banks generally calculate interest charges in one of two ways: based on average daily balance or on something called two-cycle billing. The latter, which more card issuers are not adoption, penalizes consumers who carry a balance, even if it's only on occasion.
Here's how it works: Say you start your month with a zero balance and charge an amount that you don't pay off in full at the end of the month. If your card uses the average daily balance method to calculate interest, you are charged nothing for the month you made the purchase and interest only for subsequent months in which payment is outstanding. With two-cycle billing, interest charges begin with the day you make the purchase.
Banks defend two-cycle billing as correcting the true interest charges for credit card purchases. Ron Brooks, a spokesman for National City, says it's a way to make sure card users pay interest should they suddenly go from being transactors (those who pay every month) to revolvers (those who carry a balance).
One way to avoid the issue is to stay away from credit cards that use two-cycle billing to calculate interest charges and stuck with those that go by average daily balance. Unfortunately, it's not a permanent solution. Your card provider can switch between the two with just a 15 day notice, so you'll have to keep checking.
Banks generally calculate interest charges in one of two ways: based on average daily balance or on something called two-cycle billing. The latter, which more card issuers are not adoption, penalizes consumers who carry a balance, even if it's only on occasion.
Here's how it works: Say you start your month with a zero balance and charge an amount that you don't pay off in full at the end of the month. If your card uses the average daily balance method to calculate interest, you are charged nothing for the month you made the purchase and interest only for subsequent months in which payment is outstanding. With two-cycle billing, interest charges begin with the day you make the purchase.
Banks defend two-cycle billing as correcting the true interest charges for credit card purchases. Ron Brooks, a spokesman for National City, says it's a way to make sure card users pay interest should they suddenly go from being transactors (those who pay every month) to revolvers (those who carry a balance).
One way to avoid the issue is to stay away from credit cards that use two-cycle billing to calculate interest charges and stuck with those that go by average daily balance. Unfortunately, it's not a permanent solution. Your card provider can switch between the two with just a 15 day notice, so you'll have to keep checking.
10 Things Credit Card Companies Don't Want You To Know. Part 5 0f 10
April has been Credit Card Question and Answer month here at Financial Elite. We continue with Part 5 with information provided from an article from SmartMoney about the little known rules that are costing you money and putting your credit, your identity and your family at risk.
A few summers ago, Vicki Jacobson's college-student son, Craig used his debit card to pay for a taxi ride in Italy. The driver ran his card three separate times as a credit card and three time as a debit card , not knowing that the previous transaction had gone through. Well, I am sure you can guess what happened - Craig paid for that cab ride six times. It took months to clear up the credit card charges, which finally got resolved, but it was much more difficult to get the debit card transactions cleared up.
Why was there so much trouble with the debit card transactions? Debit cards resemble credit cards in all visible ways, but offer the consumer less protection. Some debit cards offer purchase protection, meaning you can replace a damaged item within 90 days, but many did not.
And although unauthorized transactions, such as the three charges on Craig's credit card should be refunded by the issuer, banks are less motivated to speedily resolve cases involving debit cards then credit cards, why is that? Well, debit cards draw on a checking account, meaning they are essentially checks in plastic form. Credit cards are in constitute a loan, so it's the banks money , giving it more reason to protect it.
A few summers ago, Vicki Jacobson's college-student son, Craig used his debit card to pay for a taxi ride in Italy. The driver ran his card three separate times as a credit card and three time as a debit card , not knowing that the previous transaction had gone through. Well, I am sure you can guess what happened - Craig paid for that cab ride six times. It took months to clear up the credit card charges, which finally got resolved, but it was much more difficult to get the debit card transactions cleared up.
Why was there so much trouble with the debit card transactions? Debit cards resemble credit cards in all visible ways, but offer the consumer less protection. Some debit cards offer purchase protection, meaning you can replace a damaged item within 90 days, but many did not.
And although unauthorized transactions, such as the three charges on Craig's credit card should be refunded by the issuer, banks are less motivated to speedily resolve cases involving debit cards then credit cards, why is that? Well, debit cards draw on a checking account, meaning they are essentially checks in plastic form. Credit cards are in constitute a loan, so it's the banks money , giving it more reason to protect it.
Monday, April 27, 2009
10 Things Credit Card Companies Don't Want You To Know. Part 4 0f 10
April has been Credit Card Question and Answer month here at Financial Elite. We continue with Part 4 with information provided from an article from SmartMoney about the little known rules that are costing you money and putting your credit, your identity and your family at risk.
In this hyper competitive credit card marketplace, rewards are a way for banks to target big- spending niche audiences. For instance- frequent flyer's, frequent hotel stayers, or big time shoppers! But what people don't know is that these programs come with catches, such as high interest rates and/or high annual fees, so do your homework, a good rewards card done not always make financial sense for just anyone.
Before signing up for a rewards card figure out how much you have to spend to ear the incentives from any given card. If the math works out to anything less than one penny earned per dollar spend (or a mile per dollar, in the case of mileage cards), then you can do better.
Also, be sure to look for rewards that best suit your needs, For example if you want an abundance of options, from retail goods and services to charitable donations. American Express Membership Rewards cards let you accumulate points at the rate of a penny per dollar spend- and double that at gas stations and drugstores. Or if it's air miles you are after then look into the United Mileage Plus Signature Visa is one card that stands out from the pack, with its one-mile-per-dollar ratio and host of travel benefits, including upgrades.
In this hyper competitive credit card marketplace, rewards are a way for banks to target big- spending niche audiences. For instance- frequent flyer's, frequent hotel stayers, or big time shoppers! But what people don't know is that these programs come with catches, such as high interest rates and/or high annual fees, so do your homework, a good rewards card done not always make financial sense for just anyone.
Before signing up for a rewards card figure out how much you have to spend to ear the incentives from any given card. If the math works out to anything less than one penny earned per dollar spend (or a mile per dollar, in the case of mileage cards), then you can do better.
Also, be sure to look for rewards that best suit your needs, For example if you want an abundance of options, from retail goods and services to charitable donations. American Express Membership Rewards cards let you accumulate points at the rate of a penny per dollar spend- and double that at gas stations and drugstores. Or if it's air miles you are after then look into the United Mileage Plus Signature Visa is one card that stands out from the pack, with its one-mile-per-dollar ratio and host of travel benefits, including upgrades.
10 Things Credit Card Companies Don't Want You To Know. Part 3 0f 10
April has been Credit Card Question and Answer month here at Financial Elite. We continue with Part 3 with information provided from an article from SmartMoney about the little known rules that are costing you money and putting your credit, your identity and your family at risk.
Most parents send their children off to college knowing that they will be bombarded with credit card offers, but what parent's don't know is that credit card companies are taking their marketing one step farther, they are hitting up high school students. College students are considered "good risks" to creditors, because they are just starting out and they have unlimited earning potential and now high school students are being put into that category as well.
Robert D. Manning, author of "Credit Card Nation" and a professor at the Rochester Institute of Technology says that most parents do not realize how early a child's name, address, and other information, can turn up in the databases used by credit card companies to market their products- or that children as young as 16 can get credit cards without parental consent.
Creditors know that if kids get in trouble that their parents will usually pay to bail them out.
So as a parent what can you do to protect your child's financial future? Protect your child's information and assume that all requests, however legitimate, will land in a database somewhere. Gift cards, for instance, may offer protection if lost or stolen, but they do require personal information. Manning and other experts advise teaching teens about credit well before they get their first credit cards and monitor their spending as they learn to use them.
Most parents send their children off to college knowing that they will be bombarded with credit card offers, but what parent's don't know is that credit card companies are taking their marketing one step farther, they are hitting up high school students. College students are considered "good risks" to creditors, because they are just starting out and they have unlimited earning potential and now high school students are being put into that category as well.
Robert D. Manning, author of "Credit Card Nation" and a professor at the Rochester Institute of Technology says that most parents do not realize how early a child's name, address, and other information, can turn up in the databases used by credit card companies to market their products- or that children as young as 16 can get credit cards without parental consent.
Creditors know that if kids get in trouble that their parents will usually pay to bail them out.
So as a parent what can you do to protect your child's financial future? Protect your child's information and assume that all requests, however legitimate, will land in a database somewhere. Gift cards, for instance, may offer protection if lost or stolen, but they do require personal information. Manning and other experts advise teaching teens about credit well before they get their first credit cards and monitor their spending as they learn to use them.
Sunday, April 26, 2009
10 Things Credit Card Companies Don't Want You To Know. Part 2 0f 10
April has been Credit Card Question and Answer month here at Financial Elite. We continue with Part 2 with information provided from an article from SmartMoney about the little known rules that are costing you money and putting your credit, your identity and your family at risk.
2. "When it comes to identity theft, we're part of the problem."
Tony Sciulli of Santa Barbara, an identity theft victim, says it all started with a forged credit card application. A $3,000 balance was mysteriously transferred to a new credit card in his name, followed by a ready made check billed to one of his other cards. What can you do to avoid this sort of low tech thievery? Buy a shredder, and minimize the credit credit applications coming to your house by registering at OptOutPrescreen.com
But paper solicitations are only the beginning. As Internet security expert and author Bruce Schneier warns, "Data about you is not under your control." He points to examples such as May 2005 case involving Bank of America and Wachovia, in which a man posing as collection agent paid bank employees for customer data in New Jersey. The banks notified customers their data may have been compromised and offered to help watch their accounts for suspicious activity. (The man, Orazio Lembo, pleaded guilty in March 2007 and was sentenced to five years in prison and fined $20,000.)
But John Hall, a spokesman for the American Bankers Association, insists that banks have "Pentagon level security." His advice:"Monitor your accounts. Protect your passwords and your computer."
2. "When it comes to identity theft, we're part of the problem."
Tony Sciulli of Santa Barbara, an identity theft victim, says it all started with a forged credit card application. A $3,000 balance was mysteriously transferred to a new credit card in his name, followed by a ready made check billed to one of his other cards. What can you do to avoid this sort of low tech thievery? Buy a shredder, and minimize the credit credit applications coming to your house by registering at OptOutPrescreen.com
But paper solicitations are only the beginning. As Internet security expert and author Bruce Schneier warns, "Data about you is not under your control." He points to examples such as May 2005 case involving Bank of America and Wachovia, in which a man posing as collection agent paid bank employees for customer data in New Jersey. The banks notified customers their data may have been compromised and offered to help watch their accounts for suspicious activity. (The man, Orazio Lembo, pleaded guilty in March 2007 and was sentenced to five years in prison and fined $20,000.)
But John Hall, a spokesman for the American Bankers Association, insists that banks have "Pentagon level security." His advice:"Monitor your accounts. Protect your passwords and your computer."
10 Things Credit Card Companies Don't Want You To Know. Part 1 0f 10
April has been Credit Card Question and Answer month here at Financial Elite. We are going to end the month with information provided from an article from SmartMoney about the little known rules that are costing you money and putting your credit, your identity and your family at risk.
1. "We're just waiting for you to screw up."
Many things can cause your credit card interest rate to go way up into the stratosphere, but nothing faster than universal default. You can make all your credit card payments month after month for a long time, but fall behind on your utility bills and all of a sudden you are a deadbeat and you will be charged accordingly. Interest rates can change at a moments notice, from low and reasonable to up to 35%.
Credit card companies say the reason they do this is to manage risk. Consumers groups disagree, because many people in universal default aren't deadbeats by any means. For example, you dispute a medical bill or are waiting for an insurance snafu to be resolved. If a billing clerk kicks it to collections, you're in universal default. Or let's say your credit score drops--a common event that may be entirely unrelated to your bill paying behavior. That's also likely to push your interest rate higher.
The best way to avoid this problem is to pay your bills on time. Bankrate.com, a personal finance Web site, further advises that if you have a disputed bill, resolve it before it reaches collection status.
1. "We're just waiting for you to screw up."
Many things can cause your credit card interest rate to go way up into the stratosphere, but nothing faster than universal default. You can make all your credit card payments month after month for a long time, but fall behind on your utility bills and all of a sudden you are a deadbeat and you will be charged accordingly. Interest rates can change at a moments notice, from low and reasonable to up to 35%.
Credit card companies say the reason they do this is to manage risk. Consumers groups disagree, because many people in universal default aren't deadbeats by any means. For example, you dispute a medical bill or are waiting for an insurance snafu to be resolved. If a billing clerk kicks it to collections, you're in universal default. Or let's say your credit score drops--a common event that may be entirely unrelated to your bill paying behavior. That's also likely to push your interest rate higher.
The best way to avoid this problem is to pay your bills on time. Bankrate.com, a personal finance Web site, further advises that if you have a disputed bill, resolve it before it reaches collection status.
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