Credit Card Quick

Credit Card Fraud is on the Rise: How you can Protect yourself from becoming the Next Victim

Identity Theft

The numbers are quite staggering: credit card fraud flew to the number-one spot in 2009 in terms of identity theft. In particular, credit card fraud accounted for nearly 75 percent of all identity theft cases last year.

This jump in credit card fraud represents an amazing 63 percent increase from 2008. In addition, the number of identity theft victims rose 12 percent to 11.1 million.

Other numbers reported by Javelin’s annual identity theft fraud report include:

• Total losses from identity theft rose 12 percent to $54 billion in 2009, up from $48 billion in 2008.
• Theft amounts, per victim, were approximately $4,481 in 2009.
• Debit card fraud dropped to 33 percent of all identity theft, down from 35 percent in 2008.

It’s no surprise that identity theft is steadily increasing, given the amount of time that individuals spend on the Internet, notebooks and PDAs.

So, what can you do to ensure that you’re not the next victim of credit card fraud?

• Use one credit card exclusively for online shopping. This will allow you to better monitor the card and the activity on the card. You may also want to request a lower credit limit on the card to prevent a credit card thief from going wild on your credit card.
• Make sure all of your credit cards have ample credit card theft protection. Carefully read the terms and conditions of your credit cards so that you are aware of your responsibility should your credit card be stolen.
• Never, ever, ever make a purchase online unless you have the most up-to-date firewall protection.
• Pay close attention to merchants when handing over your credit card. Many of the identity thefts of today can steal your credit card numbers in a matter of second using small, handheld devices called skimmers. Many times, this theft is done when the merchant walks away from the counter to complete your purchase.
• Use the power of the Internet to check and recheck your credit card accounts. Easy-to-navigate credit card websites allow us to check our current balances, view recent transactions and pay online. Use this technology to keep a close eye on your credit cards so that if your credit card account is compromised then you can deal with it sooner than later.

Learn How to Control Debt and Enjoy Credit Card Spending

Introduction

If you are still struggling to develop good spending habits with your credit cards, but you don’t know how to start or where to turn the consider the following tips for developing a responsible, healthy attitude towards credit cards.

These tips will allow you to maintain control over your debts, will empower you, and will certainly help to build your FICO score so when you are ready to make a purchase you will be accepted and will be given the most competitive interest rate.

Here are some ideas on getting started:

• Make a budget and stick to it – Many times, we end up in credit card debt because our paychecks don’t stretch as far as we want them to. It is because of this that the most important thing you can do to improve your credit card management skills is to write down a comprehensive, realistic budget and stick to it. Write down all expenditures, as well, so you can clearly see where you paycheck goes each month.
• Recognize that your self worth shouldn’t be directly associated with buying new things – Buying new things may make you happy for a moment, but the reality is that shopping is not the key to happiness. Try this: force yourself to go “cold turkey” for one month and only purchase the essentials, such as food and gasoline. After the end of the month, when you still have money in your pocket, recheck your feelings. You may very well begin to rethink your spending habits.
• Resist Temptation – Resist the urge to spend on a whim. Stop impulse spending and this will ensure that you do not possess buyers remorse after purchasing non essentials.
• Consider all of the other things that make you happy and make a point to revisit them – If you’ve enjoyed swimming but haven’t found the time to do it, find a local YMCA and start swimming again. Consider joining a book club or taking a yoga class. Rediscover your passions or find a new one! The bottom line is that all of your happiness should not be tied to shopping.

How to Reward yourself with Responsible Credit Card Spending

Introduction

Do you want to make the change to responsible credit card spending, but you simply can’t find one good reason to stop spending recklessly on your credit card? After all, you are still able to pay the minimum payments on your credit card, so there’s no problem, right?

Well, not so fast. Your manageable credit card habit may be controllable now, but what will your situation look like in the future? Consider whether you would be able to pay your credit card bills if you lost your job tomorrow. Also, consider how long you can continue to pay only the minimum payments on your credit cards before the cards are maxed and the finance charges begin to take over. Finally, consider how many years it will take to pay off just one of your credit cards if you continue to pay only the minimum payment.

Although many of us don’t want to face these realities, the fact of the matter is that we must deal with them head on if we expect to learn from our mistakes and move forward toward a more financially responsible future.

Better yet, start rewarding yourself each time you make a responsible credit card decision. Here are a few tips to get you started towards your financial goals:

• Each time you pay for something in cash instead of credit, calculate the amount of interest you would have paid on that items and take that money and put it into a special savings account. Stay diligent and continue to do this until you have worked up to a specific savings goal. Then, take your saved money and purchase something special for yourself!
• Instead of paying just the minimum payment on your card each month, strive to put at least $20 to $50 more. You will be surprised to see how much quicker your balance shrinks just by putting a little more money towards it each month.
• After you have paid off your credit card, take the money that you used to spend on monthly payments and instead direct it into a savings account and watch your savings grow!

Why it may Pay to Stick with your Current Credit

Credit Card Types

For many of us, the great credit card balance transfer offers over the years have tempted us to transfer our credit card balances from card to card. However, given the dramatic shift in the credit card industry, what once was commonplace now becomes a liability.

This holds true for many aspects of the credit card industry, including the length of time in which we keep our credit cards. Maintaining and developing a relationship with a trusted creditor is often worth much more than the short-terms savings you may experience from balance transfer offers or introductory offers.

Here are some of the reasons why it may pay to hold onto your current creditor:

• Best rates – It’s simply a fact that long-term customers get the best rates. Most credit card companies offer great interest rates to their valued customers because they have a credit history on which to draw from. In other words, if you have proven yourself to be a trustworthy customer, your credit card company will likely reward you with a competitive interest rate. You will likely also have more room to negotiate if you feel that you creditor could offer you a lower interest rate.
• Positive impact on credit score – Your FICO score, although determined using many factors, may be influenced by your history with the same creditor. In other words, you may have an excellent payment history, but another individual with the same history that has not switched credit cards every year or so will probably enjoy a higher FICO score in this area.
• Higher credit limit – Along with a better interest rate, you will likely enjoy a higher credit limit as a loyal customer. Many times, your creditor will gradually increase your credit limit as you prove your credit worthiness to them.
• Late payment forgiveness – Good customers who almost always pay their credit card bills on time will likely enjoy leniency from their credit card company if they slipped one month and paid their credit card bill after the due date. In fact, many credit card companies will remove late payment fees for loyal customers who failed to pay their credit card bill on time just once or twice.

How to Cope with your Holiday Credit Card Bills

Credit Card Debt

You swear you wouldn’t do it, but here you are again, looking at your pile of holiday bills and grimacing at the thought of repaying your debts.

Don’t let your holiday bills bog you down all year long. Take care of them now so that you can begin enjoying a debt-free 2010.

The following tips will help you formulate a plan to pay off your holiday bills:

• Carefully review all of your credit card bills – Because there is likely a lot of activity on your credit cards from the holidays, you will want to thoroughly examine all of the charges on your credit card statements. It is not uncommon to spot errors, so the earlier you catch them, the better.
• Assemble all of your credit card statements and write down the balances, the minimum payment amounts and the interest rates on all of your cards – The general rule of thumb is to concentrate on the credit card with the highest interest rate first, so consider something like this: pay the minimum payment on all of your credit cards, with the exception of the credit card with the highest interest rate, as you will want to put as much money as possible onto this card until it is paid off. Then, do the same thing with the rest of your credit cards.
• If you have strong credit, consider consolidating all of your holiday credit card bills onto one, low-interest credit card. Pay close attention, though to the terms of the balance transfer offer, and check out the balance transfer fee.
• If you find yourself drowning in credit card debt, don’t wait to seek help. Instead, find a reputable, non-profit consumer credit counseling service. These organizations can help negotiate lower rates and more reasonable repayment terms, particularly if you are struggling to simply pay the minimum payments on your credit cards.

Understanding the Difference between a Credit Card and a Charge Card

Introduction

The terms “credit card” and “charge card” have often been used to describe the same thing but, in reality, they are two very different things.

A credit card is a standard card in which you can charge purchases and then pay them back over a period of time. A charge card, however, is card on which you can make purchases, but they must be paid off when your bill arrives.

Charge cards have been primarily issued by American Express, while other companies, such as MasterCard, Discover and Visa, have offered their customers credit cards.

The Benefits of a Charge Card

The premise behind an American Express card has always been liberal spending limits and no accrued interest rates, mainly because the card balance is paid in full each month. Most American Express credit cards have no set credit limit, but in order to qualify for an American Express credit card your credit history must be near flawless.

Annual Fee Amounts

There are also annual fees charged by American Express for its charge cards; they typically range between $25 to $500 a year, depending on the spending limit and benefits the card provides. The annual membership fee for owning an American Express charge card also comes with its share of perks, including a rewards program.

Should you fail to pay your balance on time, American Express charges either a flat fee or a percentage of the balance, depending on the card you are carrying. Most of the time, however, American Express affords its customers a liberal window in which to pay their balance; typically 40 to 50 days (compare that to 25 to 30 days for a standard credit card).

Flexible Payment Options

American Express also offers flexible payment options for its customers who use their cards to travel. American Express typically allows customers to carry a revolving balance of travel purchases, provided they exceed $200.

Credit Limits

American Express commonly keeps track of its customers buying habits and credit reports, and adjusts their credit limits to reflect this. Although American Express will not put a cap on your credit limit, they can refuse purchases if your balance becomes excessive. American Express, however, does not charge over-the-limit fees to its customers.

Why the New Credit Card Legislation may not be all it’s Cracked up to be

News

February 22^nd is the magic date when all of the credit card legislation that was passed through the Credit Card Accountability Responsibility and Disclosure Act (CARD) must go into effect. That means that all of the credit card companies must comply with the new terms set forth in the CARD Act.

Although these changes are designed to help consumers better manage their debt and to discourage credit card companies from operating under false pretenses, it doesn’t mean that you can forget about fees and hiked interest rates.

The bottom line is that you still must be a responsible consumer; it does not give you a free pass to spend as you like without consequences.

In addition, don’t assume that just because the government has reigned in the credit card companies on certain points doesn’t mean that they can’t then conjure up new traps in which to catch consumers.

The Fine Print

Most of us are conditioned to simply discard the legal mailings we receive from our credit card company about our credit card’s terms and conditions. However, we must begin to change our way of thinking because the credit card legislation doesn’t deny the right of the credit card company to raise interest rates or impose fees; it simply states that they must warn credit card customers ahead of time.

For example, your credit card company can raise your interest rate on future purchases at any time, but they must also give you a 45 day warning. If you fail to read this fine print in your contract, your credit card company could potentially raise your credit card’s interest rate and you will be none the wiser; that is, until your receive your first credit card statement with a large finance charge.

Fixed-Rate vs. Variable Rate

Another trick that credit card companies have up their sleeves is to turn fixed-rate credit card accounts into variable-rate accounts. This is because the credit card legislation only covers fixed-rate credit cards. In other words, the creditor is free to increase your credit card’s interest rate at any given time if it is a variable-rate account.

The bottom line is that we all have to become better advocates for ourselves and to make it a point to understand all of the terms and conditions associated with our credit cards.

Comparing Credit Cards: What to Look for

Choosing Credit Card

So, you’re looking for a credit card? Do you know what to look for? Do you know that a good credit card is more than just a low interest rate?

If not, then you’re like most Americans that fail to look at all of the features of a credit card before choosing one. For example, if you pay your bills in full each month, a credit card with a low interest rate probably isn’t that important to you; perhaps instead you may want to look at rewards credit cards or those with no annual fee. In other words, a good credit card means different things to different people, depending on their financial needs and wants.

With that said, here is a list of items that you may want to consider when shopping for your next credit card:

• Length of APR – Is the APR simply an introductory rate and, if so, what is the interest rate once the introductory period has ended? Is the rate variable or fixed? If it is variable, how is the interest rate determined? Is it tied to the current prime rate or Treasury Index?
• APR and Purchases – Is the APR different for purchases and cash advances? Does the APR apply to balance transfers?
• Late Payment Penalties – Can the creditor raise your interest rate after just one late payment?
• Annual Fee – Does the credit card have an annual fee? If so, are the credit card’s perks and rewards worth the annual fee? Is the annual fee negotiable with the credit card company?
• Payment Terms – How is the minimum payment calculated? How many days from your statement date do you have to pay on the credit card before it is deemed late?
• Website Features – Does the card have an easy-to-navigate website? Can you make payments, view your balances and check recent purchases online?
• Finance Charges – How are the finance charges calculated? How does the credit card company determine your average daily balance? Is there a minimum finance charge imposed by the company?
• Credit Limit – What is the credit limit?
• Rewards, Incentives, Rebates – Does the card offer any rewards, incentives or rebates? Are these rewards worth paying more in finance charges? How are the rewards and incentives calculated and earned? Are there rewards bonuses for signing up?

The Three Most Common Myths about Credit Cards

Introduction

There are some credit card myths that, regardless of how many times they are debunked, still manage to enter the minds of many credit card customers.

The best line of defense when managing our credit card accounts is to become informed and educated consumers. In other words, don’t let misunderstanding and ignorance ruin your credit and cost you big in terms of higher interest rates and declined loans.

Here are the three most common myths about credit cards:

Myth 1: As long as I pay my card’s minimum balance my credit will be great – Many consumers think that as long as they continue to pay their minimum balance on their credit card that they will enjoy a great credit score. This may have been true just a couple years ago, but many consumers have learned the hard way that it just isn’t a good payment history that determines your FICO score. Another factor that contributes greatly to your FICO score is your debt-to-income ratio.  And if you have many cards that are either maxed or close to being maxed then your debt-to-income ratio becomes skewed, thereby making you a larger credit risk and lowering your FICO score.

Myth 2: The best way to get the lowest interest rate is to transfer my balances every time I get a balance transfer offer – Many of us have played the balance transfer game over the last few years. You know the drill: you accept a balance transfer offer with a low interest rate and transfer all of your higher interest rate balances to that card. Then, once the introductory period has ended and your interest rate has increased, you find another card to do the same thing. Doing this in today’s market may not be such a good idea, though, as your FICO score is directly related to how many credit card accounts you open during a given time and how many credit card accounts you have open during any given time period. In addition, if you close an account every time you open a new one, you don’t have the opportunity to log a payment history, which therefore also negatively affects your credit score.

Myth 3: The new credit card legislation will protect me from all sneaky credit card practices – Sure, the new credit card legislation has eliminated some of the sneaky practices commonly used by credit card companies in the past. However, don’t expect the legislation to protect you from every underhanded practice. The bottom line is that there are still creditors out there who will find a way to make money; and it is up to you remain aware of any changes to your credit card account.

The Three Easiest Ways to get into Credit Card Debt

Credit Card Debt

There are certain life situations that result in credit card debt. We do our best to keep our credit card debt at bay, but there are times when credit card debt can sneak up on us when we are least expecting it.

Don’t let life situations catch you off guard and end up costing you big in the form of credit card finance charges. Instead, make it a point to plan ahead and prepare for those changes in life that can cause our finances to spin out of control.

When you are likely to get into Credit Card Debt:

• When you have a baby – Having a baby is no doubt a huge strain on any family’s finances, especially when a couple who normally lives off two salaries is not cut down to one for a specific length of time. The easiest way to plan for a new baby – and save yourself from credit card debt in the process – is to begin the task of budgeting long before the baby arrives. For example, if you know that you or your spouse will be taking time off from work to care for the baby, or if you or your spouse is even considering quitting your job to care for the baby full-time, you must understand that this can take a huge toll on your ability to budget your household. Your best bet is to begin saving as much money as possible ahead of time and to start living as if you are without a salary. That way you can begin deciding where you need to cut back and save so you are better prepared when the special time comes.
• When you change jobs – Changing jobs can be both a positive and negative financial experience. Many individuals must take a pay cut to move to a more desirable job, while others begin spending more because they are earning more. Either way, your finances can be thrown for a loop when you change jobs. To keep yourself out of credit card debt during this transitional time, remember to stick to your budget and cut down on your discretionary spending until you have settled into your new position.
• When you remodel your home – Remodeling your home is a tricky process that can often quickly spin out of control. Many remodeling projects go way beyond the projected budget, leaving homeowners little choice but to charge a good portion of the project just to get it completed. To avoid this, make a detailed budget and stick to it! Be realistic and budget for surprises or additional expenses, and revisit your budget and where you stand throughout the project as to avoid any surprises.