Credit Card Quick

Tips for First Time Card Holders

Choosing Credit Card

Obtaining your first credit card can be quite exciting, whatever your age. Perhaps you’re young, out on your own for the first time and looking to gain some financial independence. Perhaps you have fought and struggled, against the odds, to build your credit up, after years of denials, and have finally succeeded in securing some plastic. It’s great! Having a credit card  can really be a benefit and a blessing if you use it right. Face it, you probably earned this credit, and you  don’t want to hinder it now!

Here’s a few tips that will help you to avoid credit pitfalls that could lead to financial ruin.

Enticing Offers

They look good; 0% APR offers are intriguing. While these offers might sound enticing, they are merely the bait that reels in the fish. Yes, you can benefit from these offers as a customer, but you will want to read the fine print to find out just how your card works and what kind of hidden fees they are not telling you about on the package. If you don’t read these fine details, you could easily find yourself caught off guard by surprises within your credit card statement a few months down the road.

Budgeting

Sit down and write out, or utilize a spreadsheeet, your income and bills, tracking your expenses and spending. Be sure to calculate in the interest on credit card purchases and know that carrying  a balance will incur more interest over time, causing you to pay more than a purchase might be worth. List your bills in order of priority. While your credit card ill is definitely an important priority and must be paid, your living expenses must come first. if there is little room to wiggle between these expenses, you will need to curb your credit card spending substantially or only use your card for emergencies, if you want to avoid losing the credit you have built up.

Never Look at a Credit Card as “Free Money”

Credit cards are not “free money.” They serve as a temporary replacement for cash, allowing you to pay later and over time, for the purchases you make. If you can not afford it, don’t use it. Many people have gotten in over their heads by seeing credit cards as “free money,” allowing themselves to forget that not only will they be responsible for repayment of the value of the purchases made, but also for fees and interest. Ignoring the debt will not make it go away. it will affect your credit score, and you are liable to wind up with a lot of harassment and financial stress on your hands.

As a first time credit card holder, it is important to take careful steps with your card. Use it wisely to build up your credit and your financial future should be set for bigger and better things.

What Credit Card Reform Means to Those With Current Debt

News

July 2010 is right around the corner, and that means the new credit card reform laws will go into effect. Many consumers are looking forward to this, as it will ease the pain associated with flexible due dates, ever-increasing interest and other concerns that can make the convenience of a credit card a real headache. For those who already have credit card debt to pay, you may or may not benefit from these3 new laws. Read on to find out more.

Current Card Holders and New Card Holders

If you currently hold a credit card and are paying on your debt each and every month, or you are planning to apply for a new card, you can count on benefiting from the new credit card reform laws. The credit card companies will now face tighter regulation regarding when and why they raise interest rates, seeing to it that your bill is due the same day every month and not using shady tactics to overcharge and get you in a financial bind.

While you still will have a bill to pay, every month, of course, you can breathe a sigh of relief. There will be fewer surprises and the experience of owning a credit card might just become a bit more pleasant for you.

Credit Card Debt and Canceled Accounts

If you owe outstanding debt on a credit card you no longer own – an account that has been canceled or closed, you’re not going to have the privilege of benefiting from the new credit card reform laws. The debt you owe will remain the same, interest included. The only time you will see any reduction is with each subsequent payment made. While it does not seem fair, it is considered older debt, which is not covered under the reform provisions. This is not a time to count on the credit card companies to cut you a break anyway. With the losses they face under the new law, credit card companies are sure to take advantage of reaping added profits whatever way they can.

Destroying Credit Cards the Right Way: Optimizing Protection from Identity Theft and Fraud

Identity Theft

If you have a credit card that you no longer plan to use, you probably want to destroy it. However, you will want to do it correctly, taking precautionary measures to protect your identity and your credit rating.

The first step you  should take is to contact the credit card company and ensure that the account is closed or canceled. Some people fail to do this and those who do remember need to know that it can take some time for the request to be processed. In the meantime, the card might still be able to be processed, incurring more debt for you, often at a higher interest rate, was your cause for canceling due to a change in terms and conditions. Follow these tips to ensure that your credit card is properly destroyed and you are protected. Don;t just toss it into the trash!

Scissors

It’s a tried and true method, but you do not want to cut that card just any old way. It is easy for a thief to piece cards back together and get the information they need. In this day and age, thieves can easily ruin your good name with online and telephone purchase, without ever having shown the card to a merchant.

Cut your card into tiny pieces. Be sure to cut through the numbers, cross cut, cut through the signature and make it next to impossible for anyone to piece it back together or to want to go to the effort.

Shred It

A document shredder that is designed for credit cards and cds, as well as paper can effectively do the job too. These cut the cars both vertically and horizontally, into teeny pieces, ensuring no one can get their hands on your information.

Erase the Magnetic Strip and Microchip

These are the information centers of your card. Cutting them is a great idea, but take it one step further for added protection. Before you begin to destroy the card itself, take a few extra seconds to run a strong magnet over the strip. In fact, do it a couple of times, just to be sure!

Bag It

Even though the card is destroyed, bag it separately from the rest of your trash. You may wish to double bag it and then put it in the bottom of your outgoing trash. While thieves do tend to dumpster dive, they are not likely to dig through a lot of messy stuff (like your kitchen refuse) or grab for things that are not readily identifiable. If they do find it, they have little chance of using it anyway.

Recycling

Recycling is a commendable practice to add to your lifestyle. However, tossing both your credit cards and important papers into the recycling bin without having first destroyed them is not a smart idea. These things are sorted by human beings. This means your info can be seen, and face it, there is no way for you to know who is honest and who is not. If recycling is your choice, destroy it, bag it and then toss it in the bin.

Flame Broiled

If you are worried that none of the above methods can really afford you foolproof protection, burn your credit card. Yes, it’s going to smell and it will make a mess. However, a flame broiled card is a sure way to keep your identity and your good credit safe.

Frequent Flier Rewards: Will Your Miles Be Refunded if a Flight is Canceled?

Credit Card Rewards

Frequent fliers often love utilizing the perks that come with their rewards cards. Nothing can really top the perks of discounts and free or nearly free travel on your trip. For most frequent fliers, it does not take long for the rewards to add up, especially given the price for airfare these days and the way credit card companies match dollars spent for miles.

One of the biggest frustrations of frequent travel is one that inevitably comes with the territory from time to time. You purchase your ticket and head to the airport, only to find out that your flight has been canceled for one reason or another or plans have been delayed or changed. You have spent some or all of the miles accumulated on your credit card for this trip. What do you do now? Can you get them back?

The Down Side

For the most part, the answer to that question is no. You will not typically be able to do a charge back on your credit card in order to recoup the miles spent. The airlines have what is called a conditions of carriage clause. This is a long list of rules and legalities that most customers never bother to read. While these rules do address the issue of canceled flights, they leave out the issue of poor customer service. In a nutshell, most airlines make no guarantee. They say they will do their best to get you and your luggage from point A to point B, as originally planned, but they assume no liability for canceled flights and other minor frustrations and delays that a customer may encounter. In other words, you spent the miles so you may have to swallow that cost. The credit card company is unlikely to get in the middle of a customer-airline dispute, and the airline is likely to just rebook you on another flight. There is some hope in that and in some other things as well.

The Upside

While no regulations exist to ensure that you get a refund of the miles you have spent, you might have a chance to get a full or partial refund, if you take the right steps. At the very least, you will be addressing the issue of poor customer service within the airline, even if you don’t get that refund you hoped for. Never, as a consumer, sit back and allow yourself to be taken advantage of. Speak up. You could be the voice of change!

Go above the customer service department, writing a letter to a head executive of the airline. This person is likely less bogged down by complaints and might welcome your input and pay closer attention than the overworked customer service employees. Be reasonable and rational. Outline the entire situation, including exact details of what happened versus the expectations you had. Then, make a reasonable request for a refund. You will have to be the judge of how much of a refund to ask for; you simply do not want to go overboard with your request. Copy this letter and send it via FedEx, UPS or some other kind of registered mail delivery to ensure that it reaches the right person in a timely manner. Simply indicating your dissatisfaction with your experience could have you finding the satisfaction you seek.

Credit Cards: A History Lesson

Introduction

Credit cards are a way of life these days. Many of us could not imagine a world without them. Credit cards bring us lots of spending flexibility and personal perks; things unimagined 200 years ago. Where did the credit card come from and how has it evolved?

Clever Prediction

As has been the case a few times throughout recorded history, brilliant writers and thinkers, great imaginations, have predicted ideas and events in their literature that have actually come to pass. It 1887, Edward Bellamy, in his novel Looking Backward mentioned the use of little cards to make purchases. He talked about using the cards and paying at a later date. How brilliant and right on was this? Credit cards made an appearance a short time later.

The Early Years

Around 1914, gas cards came into the world. Many Americans were purchasing automobiles and this meant an need for fuel. Oil companies saw an innovative way to draw in the customers. They provided  credit cards for gas purchases, allowing customers to pay off their tab at a later date. They even went as far as to accept their competitors cards!

Next, came the store cards. It was really a gimmick for marketing and bringing in the customers. However, the customers seemed to like the buy now, pay late concept and it stuck. It helped to improve the customer base of many companies and also improved the buying power of the customers. These store cards set the standard for payment due dates and limits and helped customers to build a good reputation: the earliest version of credit ratings.

Then, in the 1930’s or 40’s, came the concept of revolving credit, which eventually did away with repayment limits, allowing customers to make purchases and pay on their balances over a longer period of time. Customers could enjoy more convenience and the idea of fees and interest to generate revenue was born.

The Modern Era of Credit Cards

Around 1950, the idea of the all-purpose credit card was brought to the market by one Ralph Sneider. The idea was that customers could do away with holding multiple accounts at various merchants and just carry one card that covered every purpose and purchase. Hello Visa and MasterCard! The idea slowly took off, rising to popularity in the last three decades of the 20th century.

Today, credit cards are a major part of everyday life for many people. This means big business. Credit card companies want customers, and definitely want to make their money too. This is both good and bad. Credit cards can help the consumer to take care of their wants an needs faster than ever before, building up their credit rating if they pay the bill and use the card responsibly. However, this eagerness to get credit cards into the hands of the customers is also a practice loaded with risk, as it leaves room for company losses and financial disaster for those who use the credit cards but can not or do not pay.

Credit cards have come a long way in history, thus far. Only time will tell what the next era will bring to this form of big business.

Should You Consider a Credit Co-Signer?

Credit Score

If you’re young, have little to no credit history, or are looking to rebuild your credit history after bad credit or a financial disaster, a credit co-signer might be in your best interest. This is a person who is going to vouch for you as creditworthy, regardless of what your credit report says. While it might be a good idea, in both theory and reality, there are some things to keep in mind. A co-signer situation is not something you want to take lightly.

What It Means

When Uncle Bill signs his name on that line, he is not only vouching for you; he is laying his own credit on the line and taking on some potential financial responsibility himself. This means Uncle Bill had better be able to trust you in the first place or he could wind up in a world of financial hurt.

Responsibility

If you’re going to use a co-signer for any kind of credit, your co-signer is going to have to have pretty good to excellent credit in the first place and reasonable income. As for you, lack of credit or bad credit is the whole reason you are using a co-signer. You need to make sure you have the income to back the credit you are receiving and to make those payments on time each and every month. If you default, Uncle Bill has to pay, and not only will he be unhappy with your lack of responsibility, he might repossess the item he co-signed for or could even take you to court over the money he is out. After all, Uncle Bill most likely paid anyway. He doesn’t want to see the good credit he has built up through the years getting flushed down the toilet.

Considerations

You and your co-signer must have mutual trust and must work together to keep things going smoothly. If you have a hard time, talk to your co-signer to work something out, even if you have to pay them back when you are on your feet again. You do not want to ruin your chances of building the credit you so desperately want and need, nor do you want to destroy another person’s credit in the process. Always use a co-signer that you know well, and always do your part. Be cautious, as a co-signer relationship with someone close to you can become a disaster if there is a default on the account. Who wants to see a friendship or family relationship strained or destroyed over financial matters?

As long as you use a credit co-signer with caution and responsibility in mind, it can be a great way to help you build your credit and gain some independence as well.

Credit Card Convenience Checks: What You Need To Know

Introduction

Some credit card companies relentlessly send some customers convenience checks. Their purpose is two-fold: the credit card company wants to provide their good customers with a convenient way to pay for purchases and get some cash and they also hope to make more money in fees by your having used these checks for a cash advance. While it may seem like a tempting convenience, some customers find the fact that the company is sending these checks an annoyance as well as a security risk. Fortunately, there are things you can do to stop this and to protect yourself. The good news is your security is really not facing tremendous risk, but still, however it is prudent to be careful.

Stop the Madness

If you absolutely do not plan to use these convenience checks and would prefer not to receive them, tell the credit card company. Call the customer service number on the back of your card and make sure they know that you want this to come to an end. You will still receive checks for up to 90 days, as there is a delay between your request and getting your name off the list of customers to send to, but at least you have taken the step to eventually bring this practice of sending checks to your doorstep to a halt.

Security

It can be alarming to know that your credit card company is sending blank checks that could sit in your mailbox for hours while you are out of the house. On the off chance that a thief is around, they might be thinking “Jackpot!” No worries. You generally will not be held liable for fraud on these convenience checks. Thieves will find out that their so-called jackpot really isn’t so. The credit card companies have verification processes in place such as calling the customer and matching signatures, as well as stores who won’t take a check from someone other then the rightful person and demand ID as well as often wanting to see the credit card that corresponds to the check.

The micro-printing on the checks makes it very difficult to duplicate them, therefore, counterfeits will easily be detected. Still, if you have lingering worries, put a stop to the sending of the checks and be sure to shred up the ones that continue to come until the company puts a complete stop to it.

Credit Card Expiration Dates

Introduction

It is a common question asked. “Why do credit cards have expiration dates?” After all, if you pay your bills, your credit is not going to expire. Credit card expiration dates exist for a number of good reasons. Yes, it can be an inconvenience, especially if you are set up for automatic payments, however, that is a minor hassle compared to the benefits of an expiration date.

Card Usage

While most store-based credit cards do not have an expiration date printed on them, they still send out a new card regularly. Standard credit cards do have the expiration date and you will get a new card periodically, If you do not automatically receive one, call and let the company know. Regular use of your card will wear out the card as well as the magnetic strip. Expiration dates and new cards ensure that you have a working card in top notch shape.

Protection Against Fraud

It is easier for a thief to do considerable damage with a bank issued credit card. Expiration dates allow you to have a good card to present in person, which validates the card’s authenticity as well as your real-time authorization with your signature. While thieves can easily get their hands on credit card numbers, it is more difficult to obtain the corresponding current expiration dates and CVVs, further tightening the reigns on fraud.

Customer Options

Having a known expiration date presents the customer with a good opportunity to review the terms and rates of their current credit card, see if any changes are coming and decide if they want to cancel the account and move on, renegotiate or stick with things as is. For customers who do not plan to change their credit card service, you can always opt for a longer period between expiration dates, but keep in mind that the life expectancy of your card and magnetic strip is likely not to exceed three years with regular use. However, a longer period between expiration dates can cut the automatic payment hassles down to a minimum. Keep an updated list of these payments, whether they be from the bank for the card or from the card to a business, so you can update them quickly and keep all of your payments flowing smoothly.

Honesty is the Best Policy: Mistakes that Could Cost You in Bankruptcy Court

Bankruptcy

If you find yourself in over your head financially and there just seems to be no other way out, bankruptcy might be the solution to your financial woes. Depending on what type of bankruptcy you file, you can get rid of all or most of your debt or at least renegotiate that debt into a more suitable payment plan. Either way, bankruptcy can rid you of a lot of financial burden. However, before you go through with a bankruptcy filing, you need to know that bankruptcy is intended for the honest creditor. If you plan to lie or try to get around something by a simple omission of the facts, it could cost you. Your case could be denied, and if you are caught committing bankruptcy fraud which happens to be a felony, punishable by some time spent in jail.

Your Assets

Don’t get rid of assets that would be protected by bankruptcy laws. Don’t try to hide assets that are not protected, and do not get rid of any for less than they are worth. You will only lose; often more ways then one. If you get rid of assets that are protected, well, you no longer have them. Period. Your loss, and you will just have to live with it. However, trying to hide an asset, especially by getting rid of it for less than it is worth, just so you do not have it at the time of bankruptcy, is not a smart move. You have to disclose your assets and the transfer thereof to the court.

Laying it on Thick

Your about to file bankruptcy, so you think, why not? One last joyride while I still have the credit to spend. Again, not a very smart move. Just because you are planning to file bankruptcy does not mean you can go out and rack up all the debt you want, under the impression that the court will relieve you of it. Increased activity or suspicious activity, followed by a bankruptcy filing will be a red flag for the credit lender. They in turn will dispute your bankruptcy claim, reporting your actions to the court. If the court finds in their favor, you might wind up in hot water with a lot of debt to pay.

Omissions

Whatever lies in your financial history, you need to first disclose it to your attorney and work out a plausible solution and then tell it to the court. No matter how shameful or dumb it might be, you have to be honest. The court requires it, if you want your attorney to help you to the best of his or her potential, you have to be open and honest. He or she can not work with you on things they do not know about.

Don’t try to fool the bankruptcy court. Odds are, they will find out one way or another. Then, you will be the one really in the hurt. You’ll still have all the debt, plus a lot to answer for, one way or another.

Credit Cards as Life Changes

Choosing Credit Card

Each and every person will encounter several different phases of life. From just starting out in in the world as a young adult to being in the midst of what is hopefully a satisfying and rewarding career to the laid back days of retirement, each stage is sure to come. For the average person, this also means changes in finances. If you carry a credit card, it is a given that you will want one that fits well with your financial status. Often, this means that as each stage in life rolls into the next, it might be time to look for a card that fits your needs at that point, as opposed to carrying a card that may no longer suit you. You will want a card that optimizes your credit and your dollar, giving you the best benefits possible.

Young Adults

Young adults are just starting out in the world. Many are college students, some working and trying to get an education; others are simply out on their own, working and trying to make a living. Either way, the budget’s probably pretty tight. At this point in life, most young adults are lucky to be making anything over minimum wage; they certainly have not yet landed that executive level job making six digits a year.

At this stage in life, training wheels are a good idea when it comes to credit cards. A young adult might ask a parent to co-sign or to become an authorized user on a parent’s account. Not a bad idea if the young adult is willing to share the cost of the charges and is exceptionally responsible in the use of said credit card. Still, some parents might fear doing this and taking chances with their own credit, therefore, a prepaid card might be the way to go.

Prepaid cards are attached to cash you have already deposited, therefore, your other cash is not tied up by this card and you can not run up a bill or overspend. Still, since there is no billing cycle, a young adult would want to practice this anyway y regularly paying the card back, in order to get a feel for other credit cards.

Also consider a secured credit card that reports your activity to the credit bureaus or a credit card with a low annual fee and mid-range interest that offers rewards and perks for things you purchase often, especially if you are a student.

Late 20s to Early 30s, Young Marriage, Starting a Family

Even if you’re making decent money, this is the point in a young person’s life where there are plenty of added financial responsibilities and squeezing a nickel becomes an art form. You learn to juggle responsibilities, pinch pennies, live frugally and still save some money. At this point in life, you want to look for a credit card that does not offer harsh penalties for spending. In other words, a reasonable interest rate. Also look for low to no annual fee and no balance transfer fees, as well as rewards that could really benefit you at this point in life, such as college savings plans, mortgage rewards, etc.

The Top of the Career Game

When you are at the top, you have perhaps seen a few things and gained a bit of experience and wisdom. This is the prime earning period, where you are set in your career, earning a reasonable annual salary and are faring well financially. You may not be wealthy, but you’re not really struggling either. Choose a card with an attractive interest rate, low to no annual fee, and decent rewards. If you have to travel for business, a card that offers miles and savings on hotels, rental cars, etc. might be quite rewarding. If you’re not a business traveler, think cards with cash back or some kind of savings plan.

Retirement Days

Retirement in itself is a reward. You have worked hard and earned those days of laid back living. Most people will, by this point in life, have saved a bit of money to live on and will be getting a pension and/or social security every month. Still, for the average person, the money is a bit tighter. It is a good idea to look for a card that can attach to your financial accounts, such as money market and bank accounts, so you can easily transfer money. This is especially good for those who choose to spend their retirement years traveling. If long journeys are not part of your retirement plans, seek a card that offers savings for eating out, seeing shows, purchases, etc., as well as the benefits of cash back rewards. Also remember to find yourself a card with a low or reasonable interest rate and low to no annual fee.

Whatever stage you are at in life, a credit card is a good thing to have. However, you want to make it work for you and work well, without spending tons of cash just to have those benefits.