Credit Card Quick

The Downfall of a 0% APR offer and How Avoid It

Introduction

That 0% introductory APR on balance transfers looks like a pretty enticing offer when applying for a credit card. Who wouldn’t want the chance to get a card with that allows you to avoid interest for the first six months or so while consolidating your credit card balances into one easy monthly payment?

Unfortunately, such an alluring offer can get you into trouble if you are not careful. While the selling point of such cards is to save the consumer some cash, using 0% APR transfer cards could wind up costing you higher interest rates if you fail to use them correctly.

Why am I Being Billed with Interest? I Thought I Had a 0% APR…

Essentially, you do, but read the fine print. Chances are, that 0% rate only applies to balance transfers, not to purchases, cash advances and so forth. Thus, if you’re using your credit card for something other than transferring the balance of your other cards onto one with a better rate, you’re going to wind up paying more. To top it off, that fine print most likely states that all of your payments will apply first and foremost to the current balance with the lowest interest rate. Therefore, on a card with 0% APR on balance transfers, your higher interest balances will remain unpaid until you have paid off the zero-interest balances. And here you thought you were saving money!

What to Do

0% introductory APR credit cards are not a bad thing to have. On the contrary, they are quite beneficial and can save you a ton of money, if you know how to use them correctly. Sure to read the terms and conditions closely so that you will know what to expect and can be prepared. Find out for sure exactly what that 0% rate applies to. If you want a 0% rate on more than just your balance transfers, try looking for a card that offers the same rate on both purchases and balance transfers. By doing this, you can use your card for everything you need without worrying about unexpected high interest rates.

If your card does not offer 0% on purchases, it is a good idea to either use it minimally for purchases or to eliminate the practice altogether, using the card only for the savings with balance transfers, at least until the introductory period has run it’s course.

How to Best Protect your Identity while Vacationing this Summer

Identity Theft

Summertime is upon us, and so is travel. If you are heading out for a long weekend or a dream vacation this summer, you will likely utilize your credit cards in one way or another.

With credit card usage, however, comes the risk of identity theft. One thing’s for certain: you don’t want to get caught in a financial pickle while enjoying your summer vacation, so here’s what you can do to protect yourself and your identity:

1. Take the majority of your credit cards out of your wallet or purse and carry only one or two credit cards that you plan on using during your holiday. If your purse or wallet should be stolen it will make your life a whole lot easier to call just one or two credit card companies than a dozen. While you’re at it: take your social security card out of your wallet and store it in a safe, secure place, as there is never any reason to carry it around.
2. Before embarking on your vacation, contact your creditors and let them know about your travel. If you let your creditors know the dates you will be traveling, it will avoid the frustration and confusion that comes along when they detect charges that are out of the ordinary for you and freeze your credit card.
3. Don’t let your mail sit in your mailbox for an extended period. The last thing you need is someone gaining access to your personal credit card statements because you didn’t collect your mail for days. Instead, ask a trusted neighbor or friend to collect your mail while you are away or contact the post office and put a stop on your mail until you return.
4. Keep all receipts from your credit card expenditures while you are away so that you can check your bill for discrepancies or errors.
5. Put away the debit card while vacationing and instead use your credit card. If an identity thief gets a hold of your debit card, your checking account can be drained in a matter of minutes. Although you will likely be protected from unauthorized charges on your debit card, it would pose a lot more of a problem to have your bank account money stolen than it would be to have unauthorized charges on your credit card.

How to Secure a Credit Card when you have no Credit

Credit Repair

You’ve finally made your way through college and are a full-fledged graduate. Now that you have a job under your belt you’re ready to take on the world; but are you?

Making your way out into the world beyond college takes hard work, determination, a good work ethic, and good credit. Although it sounds a bit weird that credit should play such a big role when it comes to independent living, the fact of the matter is that it is quite important for everything from renting an apartment to purchasing a car.

With the recent credit card legislation changes enacted by the CARD Act, many college students are no longer eligible to receive a student credit card unless their parents co-sign for it. Although the new legislation was brought about as a way to protect young adults from getting into debt even before they graduate from college, it has also made it incredibly difficult for them to establish credit during their college years.

The fact of the matter is that establishing credit is very important when heading out into the real world, and having no credit can make the process of moving on from college quite difficult. With that said, if you desire to establish a credit history, there are some things that can get you started:

• An active bank account – Make sure to keep your checking and savings accounts in good standing, and make sure to not overdraw them. Your bank accounts will likely be the first factor that will go into your official credit score, so make sure to keep them in good standing, as this clearly shows creditors that you are responsible with your money.
• Once you have maintained an active bank account at one, particular bank, go to the bank and open a credit card account. The company through with you have your bank account is the most obvious option when applying for your first credit card, as you have a history with them that they can draw from when determining whether you are eligible to receive a credit card.
• If you are unable to secure a major credit card right away, consider applying for a retail credit card. Although retail cards typically come with higher APRs than major credit cards, they are often an easy way to begin establishing a positive credit history. Just be sure to pay off your bill each month as to avoid costly finance charges.

Understanding your Rights – Credit Card Charge Dispute

Introduction

Any credit card holder knows that the time might come when you have to dispute a charge. Either it was a purchase you did not make (the result of fraud or ah honest credit card company mistake), or the terms and conditions of a purchase were not met by the merchant. Whatever it is, you have the right to say “Hold it. I should not have to pay this. Let’s discuss it.”

Of course, it is not always as simple as that. Still you have rights and you will need to assert them to ensure that you are not left holding the bag for charges that you should not have to pay.

Your Rights

Whether you bought a faulty product and the merchant will not replace or refund it, terms and conditions were not met such as timely delivery, set-up, etc. or you did not make the disputed purchase in the first place, the law protects you. You have the right to ask the credit card company to withhold payment on the merchandise. You can do this only after you have made some strong effort on your part to resolve the issue with the merchant themselves. If they refuse to work with you, go straight to your credit card company. As their loyal customer, it is in their best interest to protect you.

Of course, there are some things to keep in mind. The purchase typically has to be more than $50, within your home state and within 100 miles of your physical address. Still many companies overlook this standard when it comes to keeping and helping their customers.

What to Do

Give the merchant a chance to resolve the issue. Be nice, and you might see results. Put everything in writing. Keep copies of all correspondence, receipts, warranties, terms and conditions, etc. This creates a trail of evidence to support your claim. Check with the FTC’s Fair Credit Billing Act to ensure that you know the rules and regulations when disputing a credit card charge. Keep accurate records so that you know that everything you have said in your claim is 100% true and factual. Seek the maximum protection allowed.

Be prepared for a small fight. It does not always happen, but when it comes to ruthless merchants and he said, she said, the case could wind up in arbitration. As long as you have done your part to support your claim, you should still come out on top. The good thing is that very few disputes wind up in arbitration. It is in the best interest of the merchant and the credit card company to simply settle the problem as quickly as possible.

If you are facing much difficulty with a dispute and feel that you are in the right but getting zip for results, take your case to the Better Business Bureau or your state’s Attorney General’s office. They protect consumers by investigating claims, making an example of businesses who take advantage of the consumer and often getting the results you deserve.

Calculations: Breaking Down Your Credit Card APR

Introduction

When you have a credit card, you know that you are going to pay a certain amount in interest every year, This equates to some percentage of your credit card balance. It can be fairly low (9%-12%) for those with excellent credit or mid to high (13%-23% or more) for others. Everyone knows that carrying a balance on your credit card, combined with the APR can really add up. However, do you know how to break it all down and find out exactly what you are paying over a shorter period of time?

Calculating Your APR

Under the Truth in Lending Act, your credit card company is required to inform you of the APR that you are paying by ensuring that the rate is visible on your bill. Unfortunately, they are only required to tell you the yearly rate. They do not have to break it down for you into monthly and daily rates. No problem. You can still figure this one out on your own.

Look at your billing statement. Your credit card company either lists your finance charges at a monthly or daily rate, also called a periodic rate. To calculate your monthly rate, multiply your interest by 12. Then, to determine your monthly finance charge, take your average daily balance and multiply it by the monthly rate. If your company is in the habit of conveying your charges as a daily rate, you will need to divide your APR by the number of days in the year.

Something to Keep in Mind

Your APR is, by no means, set in stone. You might have an introductory APR that lasts a certain term or your credit card company might change your rate at their discretion. Credit card companies can change their policies, with or without reason. All they have to do is give you some short notice that the change is coming. Sometimes, it is as simple as the company trying to rescue themselves from the bad customers they have encountered, raising good customers’ rates to make up the difference. Often, however, it is because of your own situation.

If you think the credit card company is not watching you, think again. Just because you pay your credit card balance on time does not mean a thing. credit card companies periodically check customer credit reports. If you have had any difficulties in some other financial area, they will find out. The red flag goes up and now you are a high risk customer, causing your rates to soar. Fair? No, not really. Reality? Yep.

The best way to protect yourself is to pay all of your bills on time each and every month, so as to have nothing negative reflected in credit report. If you find yourself in difficulty, contact your creditors beforehand to see if you can work out a deal. Often, this will result in cooperation and will leave the difficulties unreflected on your credit report.

Your Guide to a Responsible Credit Card Plan

Credit Repair

Using credit cards is much like any other financial decision. You should go into it with a good, working knowledge of how the industry operates; how your credit card works, including the terms and conditions of the credit card; and what is expected of you as the customer.

If you take the time to educate yourself about all aspects of the credit card industry and your credit card, in particular, then you will be better prepared to become a fiscally responsible credit card customer. This will allow you the opportunity to enjoy the benefits of credit cards without the associated risks of irresponsible overspending.

Here is your quick guide to developing a responsible credit card plan:

• Credit cards are often a necessary part of building a credit history – You may be inclined to dump credit cards altogether; particularly if you’ve been privy to all of the negative press attention given to credit card companies. However, this may not be the best decision, as your credit card purchases can go a long way to building a strong credit history so you will be able to make larger purchases, such as vehicles and homes, without a problem. The best rule of thumb when building a credit history is to charge at least a few things every month and then pay them off in full when the credit card bill arrives.
• Never begin spending until you are fully aware of the card’s terms and conditions – What you don’t know can hurt you! Make it a point to always read and reread a card’s terms and conditions before accepting it; otherwise, you could find yourself paying exorbitant interest rates and fees and potentially damaging your credit. Carefully read the card’s fine print, and if there’s something you don’t understand, call the credit card company to explain it to you.
• Don’t break the 30 percent rule – One of the best rules of thumb when dealing with credit cards is to never charge more than 30 percent of the card’s credit limit; otherwise, creditors may view your spending as irresponsible and your credit score can suffer as a result. Plus, keeping your balance to a minimum prevents you from overspending and being caught in a situation where you can’t pay your bill.

How to Say Good-Bye (once and for all) to Large Credit Card Balances

Credit Card Debt

Your credit cards can become the heaviest thing you have in your wallet if you carry around large balances on those cards. Many Americans have become credit card junkies, as is evident in the fact that the average American now carries an average credit card balance of over $7,000.

Dealing with high balances on credit cards, however, doesn’t have to be a life sentence. In fact, there are a few, simple tips that can have you waving good riddance to those credit card balances, once and for all:

• Pay more than the minimum – Paying just the minimum on your credit cards will surely ensure that you will be spending the bulk of your future paying them off. Even paying just a small bit more each month on your balances will greatly reduce the time you will spend repaying them. Aim to pay double your minimum payment each month; if you can’t swing that, make yourself a promise to pay at least 20 percent more than the minimum balance.
• Make a plea to your credit card company – If you have been a solid customer and have always paid your bill on time, then you will likely be able to swing a lower interest rate on your credit card. Luckily, all it takes is a phone call, so you have nothing to lose! Plead your case for a lower interest rate and you may be very surprised to find that your creditor is willing to comply.
• Don’t bet on rewards programs – Rewards-style credit cards are for individuals who pay their credit cards off each month; they are not designed to benefit those individuals who carry a balance. After all, any type of rewards you may be earning will be quickly erased when you consider the finance charges you pay each month. Instead of hanging onto rewards credit cards, which often come with higher interest rates, switch to a no-frills credit card with a low, fixed interest rate.
• If in doubt, cut it up – If you are having difficulty managing your credit, the very best thing you can do is simply cut up your credit card. Then, work on paying it off.

Credit Card Application Denied?

Introduction

You want a credit card. You have put in a lot of time applying in an attempt to get yourself approved for that powerful piece of plastic. The only thing you’ve gotten in return? Some form letter stating that you have been refused credit for some vague reason or another. You’re probably a bit frustrated and even irritated by this. Don’t sweat it! There might be a solution.

Denial

Granted, there are those people with horrible credit scores that will find themselves denied, regardless of what they do. However, in the case of someone with ok credit, it might simply be a matter of which card you applied for. Often, without immaculate credit, it won’t be easy for the average person to get cards from certain companies or the cards with the best interest rates. It’s nothing personal. These offers are just geared towards those with the higher incomes and credit scores that make these companies bow down in awe. It’s not necessarily about you. It’s about the money, and these credit card companies do want that and lots of it.

What You Can Do

Often, the best offers are the ones listed on the internet or sent to you in the mail. Call the company and talk to them. They might be willing to offer you a different product that you can be approved for. If not, research other credit cards. Try going with something that has a higher interest rate. If you get approved, use it wisely and pay the bill on time every month. This will help to build your credit rating and possibly lead to approval on a card with a better interest rate in the future.

The bottom line is this: if you find yourself denied credit, knowing your credit score is not so bad as to merit complete denial, take a look at what you applied for, consider your other options and try, try again. if that doesn’t cut it for you, you might give secured credit cards a try. These are backed by money that you have deposited. If you use them responsibly, they too can help to build your credit, opening other financial opportunities in the future.

Thwarting Identity Theft with Credit Report Checks

Identity Theft

It only takes a minute for a credit card thief to steal your identity, but it may take months or even years to clear you name and deal with the ramifications of identity theft.

According to Javelin Strategy and Research, nearly 11 million adults were victims of identity theft in 2009 alone; an increase of 12 percent from the year before and a 37 percent increase from 2007. Unfortunately, many victims of identity theft don’t even realize they are victims until they apply for a loan and are turned down or they receive their credit card bill with thousands of dollars in charges on it.

Under the Fair Credit Billing Act, you are only responsible for up to $50 in unauthorized charges on your credit card, provided you report the charge within 60 days. However, today’s identity thieves often go much further than just charging up your credit card. They may steal your social security number, driver’s license number and begin taking out loans and credit cards in your name. What’s worse is that they may be able to go unnoticed for a long period of time before you even realize what is going on.

Your Best Line of Defense

Because of this, one of your best lines of defense when dealing with identity thieves is to closely monitor your credit report. You may also choose to place a fraud alert on your credit report with all three credit monitoring bureaus – Experian, TransUnion and Equifax – if you think that your personal information was compromised.

A fraud alert will stay on your credit report for 90 days, during which a creditor will not issue you any credit without first verifying your identity. A fraud alert will prevent any other person from opening any type of credit in your name without your knowledge. Victims of identity theft may also choose to place an extended fraud alert on their credit reports, which will be in effect for seven years.

Keeping your Guard Up

However, to protect yourself on a daily basis, it is always best to pay close attention to all statements that come to your home, including bank statements and credit card statements. It is also a good idea to order a copy of your credit report for all three credit reporting bureaus at least once a year.

You can request free reports from all three bureaus once a year, so take advantage of this opportunity.

A (Relatively) Painless Guide for Improving your Credit Score

Credit Score

If your credit score is lower than desired, take heart. There are many ways in which you can begin rebuilding your credit and redeeming your credit score.

Your credit score is incredibly important, as it will determine your eligibility for certain types of loans and credit, and will be a big determining factor when it comes to competitive rates.

• Pay all of your bills on time – OK, so this may sound like simple advice, but it is still worth mentioning. Many people think that paying a few bills late here and there will not affect their credit score but, in reality, it can lower your credit score quite a bit. If you have trouble managing your monthly bills, consider signing up for online bill payments, either through your bank or through your creditor. This will allow you to set up payment dates and amounts, thereby ensuring that your bills will be paid on time, each and every month.
• Order a copy of your credit report – It may be a bit painful to look at your credit report, but it is necessary for rebuilding your credit. Take the time to thoroughly review your credit report from all three credit reporting agencies and check for errors. Errors and discrepancies can be quite detrimental when it comes to your credit score, so immediately report any problems to the appropriate agency.
• Check your debt-to-income ratio – How much of your available credit are you currently using? Much of your credit score is determined by your available credit, also called your debt-to-income ratio. For example, if you have a credit card with a $9,000 balance and your limit for that card is $10,000, you will likely have a very high ratio. The best way to combat this ratio is to pay off your credit cards and keep your credit lines open. In addition, it is best to avoid canceling any credit cards, as this lower your available credit and subsequently lower your credit score.