Credit Card Quick

Credit Management among Consumers to Improve in 2010

News

The latest numbers are in and it looks promising.

In fact, it looks as if credit management among consumers will continue to improve for 2010. Although unemployment continues to remain an obstacle for many consumers, credit card delinquencies will continue to decline in 2010, according to TransUnion.

Although many analysts predict that the rate of credit card delinquencies will slow down during the upcoming year, they will nevertheless decline, which is a good sign for creditors everywhere.

TransUnion expects 90-day credit card delinquencies to drop off nearly 1.04 percent by the end of 2010. Most of these credit card delinquencies will be seen through MasterCard and Visa. In contrast, the third quarter of 2009 saw a decrease of 1.1 percent in 90-day credit card delinquencies.

Delinquencies peaked to their highest rate in the third quarter of 2006, to 1.42 percent. TransUnion used statistics from nearly 27 million individual consumer credit reports. Also included in the study were mortgage rate delinquencies: since 2006, mortgage delinquency rates climbed to an average of 50 percent a year, to nearly 1.96 percent in the last quarter of 2006.

It is important to realize, however, that credit card delinquencies won’t really begin to see solid improvements until jobless rates begin to decline.

The Importance of Timely Payments

The decline in credit card delinquencies comes at a time when good credit is king. Paying your credit card bill on time, each and every month, can mean the difference between being able to secure other types of credit or being stuck without any chance of financing.

In order to be certain that your credit card company receives your timely credit card payment, considering signing up for an online bill payment system, either through your bank or credit card company website. It may also help to set up automatic monthly payments, if necessary, to eliminate the chance of missing a monthly payment.

The certainty of being able to secure credit is only accomplished by maintaining an excellent credit score; and to do that, you need to always pay your credit card bills – as well as any other monthly obligation or bill – on time, every month.

Have you Read your Credit Card Notice Lately?

News

If you’ve recently received a notice from your credit card company and you haven’t read it, you may want to think about digging it out of the trash and taking a look at it.

Many credit card companies are beginning to send out notices to customers regarding changes in their accounts. Mainly due to the changes taking place because of the new credit card regulations, credit card companies have started sending out notices detailing changes in interest rates, fees and other terms and conditions.

For many credit card customers, these notices are little more than an inconvenience, filled with difficult-to-understand language that really doesn’t affect how they spend on their credit cards. But in reality, these notices can contain very important information that many greatly affect how credit card customers handle their credit card spending.

The federal Credit Card Accountability, Responsibility and Disclosure Act of 2009, which is set to take effect on February 22, 2010, includes sweeping restrictions on everything from interest rates to over-the-limit fees.

Changes to look out for:

• Annual Percentage Rate (APR)- Your card issuer can raise your interest rate, but can only do so if they give you at least 45 days notice of your rate increase. Many times, individuals do not take time to read their credit card notice, thereby catching them off guard when they notice that their rate has increased. It is therefore in your best interest to check your statement each and every month so you can be aware of any changes in your card’s APR.
• Minimum Payments – If you have different APR on different balances on the same card, your creditor is now required to apply any payments over the minimum payment to the highest rate APR. Now is the time to add more money to your credit card balance each month.
• Over-the-Limit Fees – Over-the-limit credit card fees are now being highly restricted by the new credit card legislation, which is good news for consumers. However, as a result, many creditors are therefore declining transactions that exceed your credit limit, so remain aware of your credit card balance at all times.

Post-Holiday Debt: How to Handle it so it doesn’t Haunt you all Year Long

Credit Card Debt

You swore you wouldn’t do it.

You swore you’d keep your spending in check this holiday season and lay off the credit cards. But here you are again: stuck with loads of credit card debt and equal parts post-holiday guilt.

Don’t give up hope just yet, though. The fact of the matter is that there are a few, simple ways to control your debt and spending and eliminate credit card debt so that it doesn’t rule your life.

The following tips will help get you started on a new, financially responsible 2010:

• Consolidate your debt – Often times, debt can seem all the more overwhelming and difficult to manage when you are struggling with numerous credit cards. Instead, consolidate your debt onto one credit card with a competitive interest rate and a fair balance transfer offer.
• Pay more than your minimum payment – Simply put, your credit card balances can go nowhere if you continue to pay just the minimum payment. Find at least a few extra dollars each month in your budget and put it towards your credit card bill – your balance will thank you for it.
• Order a copy of your credit report – You can’t begin to move forward until you clear up your financial past. Order a copy of your credit report from all three major credit reporting agencies (you are entitled to one free copy each year) and take the time to thoroughly check them out so you can move forward with your financial plan.
• Cancel any retail credit cards – Retail credit cards are often an invitation for financial trouble. Too much temptation combined with high interest rates often spells trouble for credit card consumers.
• Consider a home equity loan – If you have equity in your home, consider using it to your advantage and use it to pay off your credit card debt. However, if you don’t change your spending habits, you will likely end up in the same situation in the upcoming year.
• Make a budget and stick to it – Which leads me to the last tip: make a budget and stick to it. The bottom line is that if you don’t make a point to change your spending habits and your view on finances, you will likely find yourself in the same financial mess as you are in right now. If your finances and credit card debt are more than you can handle, consider speaking with a non-profit consumer credit counseling service.

How to Start your New Year Financial Resolutions

Introduction

Individual stock funds continue to rise; the housing market finally hit bottom; and market volatility has finally stabilized. Whew.

It is important to understand that, although 2009 was a year of uncertainty and change, in just about every aspect of our economy and nation, there was plenty to learn from. Now is the time to take that knowledge and move forward so that you can build a better financial future.

So, 2009 wasn’t all bad news.

With that said, now may be the perfect time to begin your New Year financial resolutions. Here are some resolutions to start with:

• I will work towards erasing my credit card debt – For many individuals, credit card debt still remains an all-consuming headache. Make 2010 your year to erase your credit card debt so that you can use your money to get ahead financially instead of pay interest on credit cards. Make a budget, find extra money in your budget and make a game plan to pay off your credit card debt.

Make a list of all your credit card debt, including their interest rates and balances. Then, work towards paying off your highest interest rate debt first and working your way down the list. Find ways to save money; eat out less; cut down on your cable bill and clip coupons for groceries. You’d be surprised to find out how much money you can save each and every month!

• I will learn from my past financial mistakes – We all need to learn from our mistakes, and that goes for financial mistakes, too. Don’t beat yourself up for past financial mistakes; instead, use your knowledge to move forward and create a strong financial future. Your first New Year’s financial resolution can be to move forward and learn from your mistakes!
• I will work towards a long-term financial strategy – Your credit card and financial strategy cannot be complete without looking forward to your long-term financial strategy. Revisit your retirement funds, long-term care policies and life insurance policies to ensure that you are protected financially, both now and in the future.

Smart Financial Advice for College Students

Introduction

We all know that establishing a strong credit score first begins with being able to establish credit. And with the new onslaught of credit card laws, many students may be left in a precarious position of not being able to secure a credit card to begin establishing credit.

Under the new credit card laws, a college student must be able to prove his or her ability to pay on the card. In other words, if you don’t have a job, you can forget about securing a credit card.

However, even if you are able to secure a credit card, it certainly doesn’t mean that you should have one. If you are not ready to be financially responsible, simply avoid credit cards for the time being. Otherwise, you could find yourself in a big financial mess, even before you graduate from college.

For the remaining college students who want a credit card and are able to afford a credit card, there are a number of things that should be considered:

• Search for the credit card that features the best terms and conditions. Now is not the time to search for rewards and airline cards; instead, concentrate on finding a student credit card that offers competitive terms and conditions.
• Always –  pay your bill on time. There is nothing that could damage your newly found credit faster than not paying your bill on time. And don’t forget about your cell phone or rent, either, as these could also negatively affect your credit if you fail to pay them on time.
• Avoid retail credit cards, as they often come laden with high interest rates and fees. In addition, many consumers are far more likely to overspend in their favorite retail store if they have a store credit card. Your best bet? Skip the store credit cards and stick with one, major credit card for purchases.
• Make a conscious effort to only charge what you can reasonably pay off within a month or two. Credit card debt is sneaky, as the balance can creep up on us and, before we know it, we are faced with a high debt that we simply can’t pay down.

Benefits of using Credit Cards on your Next Vacation

Credit Card Rewards

Everyone wants to make the most out of their vacations, and there is no easier way to do this than to use your credit card.

Before you laugh off the notion of a credit card making your vacation better, consider the following perks of using credit cards the next time you vacation:

• Airline miles – Earning frequent flyer miles are a fantastic reason to use your credit card for your next vacation. The more you spend, the more frequent flyer miles you earn. Consider using your frequent flyer miles to discount your next airline ticket, or charge your vacation purchases to begin earning more frequent flyer miles for your next trip.
• Free Hotel Stays - Check your rewards credit card to see if it applies to hotel stays. Many rewards credit cards work with hotel chains to pay for free hotel stays with rewards points. There are also several credit cards that offer bonus rewards points for simply making the first purchase on your rewards credit card (try the Citi Hilton Honors Card).
• Free Car Rentals – Most credit cards offer discounts on rental cars when you use your credit card. Many cards offer free car rental days simply for using their credit cards (try the WorldPerks Visa Signature Card).
• Car rental insurance – Rent your next car on your credit card and take advantage of the card’s rental insurance. The Citi Platinum Select card, for example, allows you to decline the rental car’s insurance and instead be protected through your credit card.
• Travel accident insurance – Before you purchase travel accident insurance through a travel agency, check to see if your credit card company offers it. Most Chase cards, for example, offer free travel accident insurance when you book your travel with your credit card.
• Emergency Roadside Assistance – Most credit cards offer emergency roadside assistance, so check to make sure your credit card also offers this service before embarking on your next road trip. Most Capital One credit cards offer this feature.
• Theft Protection – Credit cards that offer theft protection coverage allow you to feel safe making credit card purchases while on vacation, and also eliminate the need to bother with traveler’s checks. Contact your credit card company and ask about their theft protection coverage, as most credit cards offer some sort of protection against unauthorized use of your credit.

Your Options for Consolidating your Debt

Credit Card Debt

If you are frustrated with your debt and the number of checks you must write every month then you may have considered consolidating your debt.

Consolidating debt is often a popular choice for individuals who are looking for the convenience and practicality of paying just one bill every month instead of multiple bills; it is also ideal for individuals who are looking to lower the interest rate on other higher-interest rate debt and establish one, affordable payment.

The consolidation of debt is quite easy, provided you have a solid credit score and a low, debt-to-income ratio. Debt consolidation is probably not right for individuals with poor credit, as they are either unlikely to be approved for debt consolidation loans or credit cards, or they are likely to pay high interest rate on the loan.

Debt consolidation is often the smart choice for paying down debt and achieving the financial freedom that is highly desired by so many people.

Your Debt Consolidation Options:

• Debt Consolidation Loan – A debt consolidation loan is often a popular choice for individuals searching for a small, affordable payment. Debt consolidation loans may be taken out for a number of years, depending on what you can afford to spend each month to pay off the loan.

Many times, lenders will offer consumers a choice regarding the length of their loan. The longer the loan term the lower the payments, and vice versa; however, it is important to point out that longer loan terms also mean more interest charges. Debt consolidation loans typically fall under the category of personal loans, and can therefore feature different fees, loan terms and conditions. Compare lenders to find the best consolidation loan with the most competitive rates; however, it is important to remember that debt consolidation loans, because they are typically unsecured loans, come with higher interest rates than other types of secured loans, such as home equity loans.

• Home Equity Loans – Speaking of home equity loans, many consumers choose them to consolidate their debt because they typically offer low interest rates and long loan terms. Your ability to obtain a home equity loan, however, will be dependant upon several factors, including the amount of equity you have in your home. In addition, it is important to remember that home equity loans come with their own share of risks because they are attached to your home. In other words, if you fail to pay your home equity loan you could risk losing your home.
• Credit Card Consolidation – Perhaps the easiest way to consolidate your debt is through a credit card. Many times, credit card companies will offer consumers the option of transferring debt onto one, low-interest rate credit card. Many credit card companies offer enticing, introductory rates for balance transfers, as well. There are a couple things that need to be remembered about consolidating your debt onto one credit card: pay close attention to the card’s terms and conditions, including balance transfer fees, and pay close attention to the card’s interest rate once the introductory period has ended.

Along with New Credit Card Laws comes Consumer Responsibility

News

The government has stepped in and curbed the fees, rates and tactics that credit card companies can throw at consumers. But where is the all-important consumer responsibility?

The new credit card legislation, set to go into effect in February, is laden with plenty of rules and regulations that credit card companies must follow. From restricting college students’ access to credit cards to changing rules regarding interest rake hikes and due dates, the law is designed to help consumers better manage their debt.

Recognizing Personal Responsibility

However, don’t expect the government (or the credit card companies) to take the place of your personal responsibility as a consumer. If the credit card company’s terms, conditions, rates and fees are now transparent then the responsibility lies solely on the consumer. In other words, there’s not much more the government can do to help you responsibly manage your money.

Credit card reform is only half of the equation; consumers must be other half.

The Importance of Learning from Past Mistakes

The credit crisis and subsequent recession has taught us all many lessons. Many consumers are now rethinking their once-impulse purchases; people are making budgets and sticking to them; and still many people are simply saving more and spending less.

If anything has come out of credit card reform is that everyone needs to be accountable for their actions. The bottom line is that it is ultimately your decision to spend or not to spend on your credit card. You have the final say and you – and only you – are left with the credit card bill at the end of the month.

For many consumers, this is a great time to reevaluate their needs, pay off their credit cards earlier than later, and simply take a good, hard look at their past spending habits so they can begin changing them for a better tomorrow.

Take this opportunity to review your credit card and spending decisions and make positive changes. Develop a realistic budget and stick to it; reevaluate your credit card needs and ditch the ones that simply are not working for you anymore; find a great credit card with competitive rates and excellent terms and conditions; and make a commitment to pay your card in full, every month, without exception.

Here’s to a healthier 2010!

The Four Easiest Ways to Plunge yourself into Debt

Credit Card Debt

There are many articles out there that teach you the importance of good credit and low credit card debt; however, this article does just the opposite. What better way to ruin your credit and get yourself in over your head in credit card debt than to follow these four, simple rules?

1. Forget about your budget – One of the easiest, most surefire ways to get yourself into deep credit card debt is to spend like you have no budget. Many individuals, with a credit card in their hand and a hefty credit card limit, are likely to overspend. This is because a credit card can quickly give individuals a false sense of wealth and security when, in reality, it is debt that they simply cannot afford to pay off. Making a budget and sticking to it is often a great, first step in reigning in your credit card purchases and keeping your mind realistic about your expenses.
2. Pay only the minimum payment – It may be incredibly tempting to pay on the minimum payment each month, but that will get your credit card debt nowhere fast. The best case scenario is paying off your credit card debt in full each month; however, if this isn’t possible, make it a point to pay more than the minimum payment so that you are paying on the principal of the loan, and not just the interest.
3. Make your payment late – Making your payment late is a great way to plunge yourself further into debt! From late payment fees and increased interest rates to a drop in your credit score, making late payments is, without a doubt, the best way to ensure that you will remain in credit card debt.
4. Take out cash advances – Cash advances are sneaky little conveniences that end up costing big in the long run. First of all, cash advances come with their own, higher interest rate than standard purchases. Second, they raise little red flags with your credit card company that you may be desperate, thereby often signaling a drop in your credit score and an increase in your credit card interest rates.

Consumers Turn to Debit Cards this Holiday Season: but is this the Smart thing to do?

ATM

You may be taking the responsible route this year and ditching the credit card for a debit card instead. But is this the smartest – or safest – decision to make?

For many individuals burned by the economy and the credit crisis, turning to debit cards to make purchases just makes more sense than credit cards. According to their rational, using a debit card will help them to better manage their budget and stay within their budget.

Still, others are simply turning to their debit cards out of anger with the credit card industry. Many credit card customers have ditched their credit cards after their creditor either lowered their credit limit or increased their interest rate.

With Benefits Come Risks

Although the thinking behind using a debit card makes sense, there are a number of risks that go along with carrying a debit card around this holiday season.

First, it is important to realize that carrying around a card that is linked to your bank account is generally risky. If the debit card is lost or stolen, your bank account and its contents may be at risk. After all, the last thing you need this holiday season is for a credit card thief to drain your checking account.

Better Safeguards for Credit Cards

Although bank and debit cards offer protection against unauthorized use, there are more safeguards in place for credit cardholders. In addition, it may take some time for the bank to reimburse you for stolen money, which may simply come too late when you have bills and other household expenses to take care of.

The Threat of Bank Overdraft Fees

Second, although a debit card is a great way to keep your spending in check, if you don’t pay close attention to your balance you could be faced with stiff overdraft fees. Many individuals simply assume that their card would be declined if there was not enough money in the account, but that is not always the case. In fact, consider that banks collected nearly $35 billion in overdraft fees last year alone.

Keep in mind that the median overdraft fee is $35 for each purchase, so imagine what a handful of overdrafts in one day could do to your coveted budget. Credit card interest rates aren’t sounding so bad anymore, are they?