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Newest Credit Card Scam Targeted at Veterans

Identity Theft News

We all must be aware and diligent when it comes to protecting our credit, as credit card scammers seem to be keeping up with the best efforts of industry fraud experts.

It is important to note that no one – and I mean no one – is safe when it comes to credit card scammers.

Case in point: the Department of Veteran Affairs recently sent out a warning to all veterans, as the latest credit card scam appears to be targeting this group.

The scam against veterans works when a scammer calls a veteran, posing to be a VA worker. The scammer then proceeds to ask for the veteran’s credit card information so that he/she can update the veteran’s prescription information. The scammer often informs the veteran that the VA has changed the process of dispensing prescriptions, so they need a credit card to do so.

Veterans need to understand that the VA will NEVER ask them to disclose their personal or financial information over the phone.

Although this scam is not new, the Department of Veteran Affairs has noticed a sharp increase in this type of scam as of late. And credit card scams are just one of countless scams targeted at veterans at any give time. Other scams targeting both active military and veterans include life insurance scams, payday loan scams, car title scams, repair scams and loads of fraudulent discounts.

How to Protect yourself from Credit Card Scammers:

• Never reveal personal or financial information to ANYONE unless you have initiated the call.
• If you are ever suspicious of a call, simply hang up and contact the company directly to address the validity of the call.
• Never open or respond to unsolicited emails, even if they claim to be from a trusted source. Banks, credit card companies and the VA will never ask for your personal information via email.
• Only do business with trusted sources.

New Credit Cards Tout Simplicity

Choosing Credit Card

If reading and understanding the terms and conditions of your credit card make your head spin, you’re not alone.

With credit card companies constantly changing their terms and conditions, and with the new regulations and restrictions being placed on creditors, the process of understanding your credit card has become all that more complicated.

However, some banks have recognized this and have begun to offer credit cards that tout the concept of simplicity.

Sounds nice, doesn’t it? Now we no longer need a degree in finance to understand our credit card statement, as well as its terms and conditions.

Bank of America Basic Visa

Bank of America was the first to jump on the “simplicity” bandwagon, with a “basic” credit card for customers that want straightforward language that is easy to understand.

Called the Bank of America Basic Visa card, this new credit card, which was recently introduced, features an easy-to-read, one-page explanation of its terms and conditions and a simple, $39 late payment fee.

Bank of America has responded to many customers’ desire for more transparent credit cards. Bank of America hopes this new card will eliminate confusion among customers.

Bank of America was also one of the first banks to introduce basic mortgages, as well, and backed up their promise of simplicity with a “clarity commitment.”

The fixed rate on this Bank of America Basic Visa applies to any type of transaction, including cash advances. The fixed rate will be the U.S. prime plus 14%. This rate will not change, regardless of the customer’s payment history or credit rating. In addition, there will be no fees if the customer exceeds their credit limit.

JP Morgan Chase Blueprint

JP Morgan Chase, likely in response to Bank of America’s new Basic card, has also rolled out its own version of a simplified credit card, called the Blueprint Card. This card provides greater flexibility to customers regarding how they pay their credit card balances every month.

As more and more customers become disheartened by forever-changing credit card practices, charges and fees, credit cards are being used less and less. It is now up to the credit card companies to follow the direction of Bank of America and Chase and start offering consumers what they’ve wanted for years: simplicity.

How to Protect your Credit after Divorce

Introduction

If you are currently going through a divorce, you are probably dealing with a range of emotions and feelings. However difficult this may be for you, you must still consider your finances and your credit so that you can forge ahead and create a new life for yourself.

The first concern associated with finances and divorce, of course, is the joint household money. Most married couples, instead of keeping separate accounts, will usually combine their money into joint accounts; and this also holds true for debts. Your debts and your spouse’s debts now become “family debts.” In other words, your debts are your spouse’s and your spouse’s debts are your’s.

Many divorcing couples seek the services of financial professionals to handle such financial issues as: mortgage payments, joint credit cards and investment and retirement portfolios.

However, there are a few things that you should do immediately, on your end, once divorce is imminent:

• Close all joint accounts and open your own personal accounts.
• Consider selling joint assets, including real estate, if you need to resolve joint debt, such as credit cards, car loans, personal loans, etc.
• If you are experiencing trouble paying your bills, contact a reputable consumer credit counseling service.
• Immediately cancel all joint credit card accounts so that you don’t find yourself being held responsible for your soon-to-be ex’s expenditures before the divorce is finalized.
• Open a credit card account in your own name so that you can begin to build your own credit history.
• Order a copy of your credit report so that you have a better idea of what kind of debt – and how much debt – appears in both your and your spouse’s names.
• Resist the urge to spend joint money out of anger or spite. It will get you nowhere financially if you rack up more bills and will only hurt you in the end.
• Encourage open communication with your soon-to-be-ex, if possible, regarding current debts and their repayment terms.

Just when you Thought you were Safe: New Credit Card Fees to Annoy you

News

The new credit regulations and reform laws, which have begun rolling out as of late, are designed to protect the consumer from unfair and deceptive credit card company practices. These new laws will stop such practices as double-cycle billing, over-the-limit fees and super-short billing cycles. However, they may also be the catalyst for new fees.

Yep, new fees. Just when you thought the credit card companies were finally reigned in, along comes a slew of new fees to irritate you, inconvenience you and generally make you mad.

It pays to point out that, although the government has tried their best to thwart deceptive practices by creditors, there will always be loopholes that creditors simply can’t wait to jump through.

Many creditors argue that these new credit card laws will hurt them financially and that they must recoup their losses somehow, while the government continues to make them walk the line. And where are you, the innocent consumer? Caught right in the middle, of course.

So, it pays to mention that, although your creditor will soon have to provide you with plenty of time to pay your bill and a clear, easy-to-read monthly statement (among other things), that they may also decide to throw in some new fees that may leave you scratching your head and wondering if the new credit card legislation simply opened up a whole, new can of worms.

What you may be charged for in the future:

• For checking your balance – Your credit card company may begin charging you for performing small, account maintenance activities, such as checking your balance or requesting a credit limit increase.
• For simply having a card – Annual fees gradually disappeared, especially during the height of the economy a few years ago. However, more and more credit card companies are re-introducing their annual fees.
• For not using your card often enough – Many credit card companies have now begun charging consumers for not using their cards. This fee is often charged to provide the consumer with either an incentive to begin using the card or to simply cancel it.
• For participating in rewards programs – Rewards programs may soon come with their own set of fees and restrictions, so be on the lookout for any changes in your rewards program.

The FICO Score Problem – How it May Become Your Problem

Credit Score

Many of us have watched helplessly as our creditors started slashing our credit limits. Many banks and lenders began cutting credit limits in an attempt to avoid additional losses after the credit crisis took its grip on the economy. As a result, many of us saw our credit card limits being cut – often in half.

However inconvenient or irritating this may seem, it may actually be much, much worse.

Why?

Well, it all begins and ends with the FICO score model. Your FICO score is often directly related to your debt-to-income ratio. So, if your $20,000 credit limit is suddenly slashed to $10,000 then your open credit all of a sudden took a hit – and so did your FICO score.

The worst part, perhaps, of this whole FICO score mess is that many cardholders have seen their credit limits slashed simply because the creditor or bank was looking to avoid losses, not because of anything they did or didn’t do.

As credit limits continue to be cut (with many financial experts predicting that this will only get worse, given the new credit card legislation), many consumers are now watching as their FICO scores fall. In fact, FICO estimated that more than 30 million Americans saw their credit limits reduced in 2008 alone.

A lower FICO score, as many consumers already know, will make the consumer look like more of a credit risk. This, in turn, often means that their ability to secure a loan becomes more difficult, and that they will begin paying higher interest rates than their financial counterparts.

In other words, the FICO scoring system, at this time, may be quite an inaccurate way to gauge an individual’s credit risk.

Is there anything you can do?

Unlikely. You can certainly call your bank and plead your case; however, the credit reductions are usually set in stone and done across the board. The best thing we, as consumers, can do at this time is to keep available credit open, to not cancel any credit cards, and to pay down our balances on our existing credit cards and loans.

Important Facts about Fighting Fraudulent Credit Card Charges

Identity Theft

Most creditors offer some protection against fraud and identity theft, but this protection is not all-encompassing. In other words, there are a certain set of rules to which you must abide to be covered by your creditor for fraud and identity theft.

For example, there is a recent story about a Denver man that paid on his credit card religiously, every month, for the same amount. Because of this, he rarely looked at his monthly statement; he just simply sent in his fixed payment. That’s all fine and dandy, but what he failed to do was realize that a credit card thief had managed to charge upwards of $11,000 on his credit card. Because the Denver man failed to realize these charges in 60 days, as required by the creditor, he was, in the end, responsible for all those charges.

Although most fraudulent charges or mistakes to your credit card account will be considerably much less than the Denver man’s $10,000 bill, they can still sneak onto your bill when you’re not looking. Don’t be caught paying for someone else’s mistake or fraudulent activity. Take charge now and fight back against fraudulent charges!

What you can do to protect yourself against paying for fraudulent charges on your credit card:

• Always, always, always carefully read your monthly statement. Just the like above story, if you fail to notice fraudulent charges on your card in the time frame set forth by your creditor (usually 60 days) then you, too, could be responsible for any charges on your card.
• Contact the merchant directly if you notice a discrepancy on your credit card bill. Often times, discrepancies on your credit card are simply mistakes. If you are unable to find a resolution to your problem with the merchant, contact your credit card company.
• If you find yourself in a situation where the merchant is denying a mistake, you will want to provide documentation to plead your case. Keep all receipts, email and tracking numbers and submit them with your dispute to your credit card company.

Learn about your Credit Card’s Features and Save

Credit Card Rewards

Often times we find ourselves so concerned about our credit card’s terms and conditions that we fail to recognize that our cards carry some great features that can help us save money, manage our money and protect our purchases.

Although it certainly is important to thoroughly read our credit card’s terms and conditions so that we understand such things as our APR, our monthly due dates, cash advance fees, credit limit and the like, we should also take the time to read all of the features that so many creditors offer with their cards.

So many consumers fail to read and understand their credit card’s features, which means that many of us are losing out on some great perks and features. In other words, take a second look at your cardholder agreement to learn about your credit card’s benefits:

• Proof of purchase – Perhaps one of the best features of your credit card is your monthly statement. Sounds weird, doesn’t it? But it’s true! Your monthly statement is a clear proof of purchase for any expenditure, so if you need a run-down of expenses for your business, for your taxes or simply for your own records, your credit card statement does the trick. Plus, it can also serve as a receipt for a purchase if you misplaced your original store receipt. The bottom line is: hang on to your monthly credit card statement – you never know when it will come in handy!
• Purchase protection coverage – Many cards now offer purchase protection coverage, which essentially protects you from damaged or defective goods when purchased on your credit card. Your creditor can actually go after the retailer in question to get you a refund on a defective or faulty purchase.
• Car insurance rental coverage – Did you know that if you pay for a rental car with your credit card that you may automatically have rental insurance coverage? Many creditors offer their cardholders insurance coverage for rental insurance companies; which means that you won’t have to purchase the costly insurance through the car rental company.

How to Protect your Credit Score Following a Layoff

Credit Score

A layoff, however common in today’s economy, still comes as a bit of a shock to most Americans. Aside from being emotionally upset and mentally stressed, you may be worried if your credit is going to take a hit during this difficult, financial time.

The bottom line is that you can protect yourself and your credit now, even in the midst of a layoff.

Aside from curbing your spending and putting yourself on a tight budget, there are a variety of things you can do now to protect your finances and your credit following a layoff:

1. Always pay your credit card on time – no matter what! The worst thing you can do is to simply throw your hands in the air and admit defeat. Do whatever you need to do to pay your credit card bill on time each and every month. You may want to consider lowering your monthly payment to cover just the minimum payment while you are unemployed, and that’s ok. However, not paying at all will do nothing more than put yourself in a sticky situation regarding your credit score.
2. Use your emergency fund to get by – Now is the time to dip into your emergency savings funds, if necessary, to pay your bills and take care of your monthly debts and obligations. However difficult it may be to use your savings account, remind yourself that this is the reason you established it in the first place. You can also replace your savings once you get a new job, but you can’t repair your credit that easily.
3. Avoid dipping into your 401K – In extreme circumstances you may need to borrow against your 401K to get by during a layoff or other financial difficulty, but this should be the exception and not the rule. The penalties and fees you will pay to borrow money from your 401K simply don’t make sense.

College Students: Easy Ways to Begin Building your Credit Now!

Credit Score

The college years are filled with excitement and optimism, yet they can also be riddled with uncertainty about life after college. It is therefore of the utmost importance to start thinking about life beyond college, even if you’re still a freshman!

In particular, it is vital that you begin working to establish a strong credit history so that you can begin your life after college with a good FICO score in your back pocket. After all, your ability to obtain a car loan, a home loan or even a good job relies on a strong credit score.

How to Start Working toward a Great Credit Score while you’re still in College:

a)      Jump onto your parent’s credit card. If your parents are good with their credit, and if you are ready to take on the responsibility of a credit card, you may want consider asking your parents if they can add you to their credit card account as an authorized user. This is often a great way to begin establishing your credit history, and is a solution to the tight restrictions due to be placed on student credit cards as a result of the new credit card legislation.

b)      Ask your local bank or credit union if they provide student credit cards. Although these types of cards typically come with a low limit and a higher APR, they are still the ideal way to begin building your credit history. This is not the time, however, to get yourself into credit card debt. Make a point to purchase only needed items, and to also pay off your balance in full, every month, without exception.

c)       Consider a secured credit card if options A and B aren’t possible. Secured credit cards require a cash deposit equal to your credit limit, so that the bank will be protected in case of your failure to pay. However, they are also a practical way to build your credit history. Then, once you have established a strong credit history you can move to a standard credit card.

Beware of new Creditor Tactics in Response to the New Credit Card Legislation

News

As the new credit card legislation gets under way, there are many loopholes that are being discovered. This incessant game between the government, the creditors and their customers has hit an all-time high, it seems, with the government trying to reign in deceptive practices and creditors responding by finding other ways to charge customers or cut their benefits.

How can you make your way out of this mess, unscathed, you ask? By remaining aware of all the changes taking place with your creditors and your credit cards.

The following is just a few of the changes you will want to keep an eye on:

• Many creditors, in response to the recent legislation requiring them to inform their customers at least 45 days in advance of a change in their fixed interest rates, are now changing those fixed cards to “variable” cards.  Doing so allows the creditors to change rates as desired because the legislation loophole doesn’t apply to variable-rate cards.
• Many lenders are now charging “inactivity” fees for customers who don’t use their cards frequently. Don’t be surprised to find a $19 inactivity fee if you haven’t used your card in more than a year.
• Many creditors have agreed to lower interest rates for customers, but many of those creditors have closed the customer’s account in response.

As with any other piece of legislation, there will be loopholes that simply can’t be avoided. However, if consumers make it a point to remain aware of their card’s terms and conditions and to ask questions and cancel their cards, if necessary, then many creditors will realize that they must impose realistic terms and conditions on their credit cards.