Credit Card Quick

Credit Card Tips that will never Let you Down

Introduction

We are constantly bombarded with tips and hints for smart credit card use, but how can we distinguish between the helpful and not-so-helpful tips?

Although each financial situation is different, there are a key set of tips that will never guide you wrong and never let you down when it comes to managing your finances and your credit card debt:

• Pay on time – So this first tip may sound a bit obvious, it begs repeating: you must pay your credit card bills on time, each and every month, if you expect to enjoy a strong credit rating. Although you may think that your late payments are not such a big deal, understand that creditors and the credit reporting bureaus may not agree with you. If you have a difficult time paying your bill on time, consider setting up automatic bill payment through your credit card or your bank.
• Stay away from any type of “convenience” offered by your creditor – In particular, avoid at all costs cash advances, as they come with hefty fees and are looked down upon by the credit reporting agencies when it comes to your FICO score, and convenience checks, as there are almost always fees and other strings attached to them.
• If you don’t need it, don’t get it – Simply put, applying for a credit card merely to get rewards or other perks is a tricky situation in which to put yourself. In particular, be extra careful when it comes to retail credit cards, as they are notorious for offering attractive deals, while at the same time charging super-high interest rates. It also never hurts to take an inventory of your credit cards on an annual basis to ensure that they are still working for you.
• Be diligent when it comes to checking your credit card accounts and credit score. Don’t just pay your balance each month; take the time to look over your statement and double check all of the charges.  Order a copy of your credit report at least once a year, or more if you suspect foul play. It never pays to be too diligent!

Your Guide to Formulating your Credit Card Plan

Credit Card Debt

Do you have a credit card plan in place? If not, or if you’re not even sure what a credit card plan is, consider that formulating a game plan for your credit cards and your overall financial goals is one of the easiest ways to reign in your spending and keep your budget where it belongs – in the black.

How can you formulate a credit card plan? The easiest way is to determine your overall financial goals – both in the short term and in the long term. How do you want to manage your money? How much money can you comfortably afford to spend on credit cards each month? Will you always commit to paying off your credit card in full each month or have you developed a game plan for paying off existing credit card debt?

In other words, everyone’s credit card plan will look slightly different, but all will have the same goal: to use credit responsibly and to keep our credit card debt to a minimum.

Here are some factors you may want to consider when formulating your credit card plan:

• Pay as you spend – A great way to keep your head above water when it comes to finances is to commit to paying off your credit card bill, in full, each month as to not accumulate any debt. You may also commit to not spending on your credit card until the bill has been paid in full.
• Never exceed the 30 percent mark – The magic number, it seems, for credit reporting agencies when determining your credit score, is 30 percent. In particular, credit reporting agencies want to see your overall debt account for less than 30 percent of your income; and that includes your credit card debt. Take the time to review your debt picture and determine whether you have exceeded that 30 percent mark, and then make a commitment to either lowering your debt or keeping your debt under this magic number.
• Develop a payoff goal – and stick to it – Many consumers’ credit card plan is undoubtedly paying off their existing credit card debt. Although how you will pay your debt off will vary, the overall goal should be the same. Therefore, once you have determined the time frame during which you want to pay off your debt, and the payment that you can afford each month, stick to it. In other words, make a commitment to follow through with your payoff goals.

The Dangers of Shuffling your Credit Card Balances

Credit Card Debt

You have likely heard of the “credit card shuffle”; you know, using one card to pay off another card or using one card to pay the minimum payment on another card.

Let’s face it: the struggling economy has left many of us with too many bills and not enough cash. As a result, consumers have had to get creative, and that means doing the credit card shuffle.

Although you may think that you are preventing problems by shifting around balances and using one credit card to pay the bill of another credit card, the truth is that you may simply be delaying the inevitable and putting yourself into a situation that you may not be able to get out of.

Credit card use over the last few years, for many individuals, has gotten out of hand. Instead of making purchases and paying them off in a reasonable amount of time, many consumers found themselves using their credit cards to live beyond their means and pay for things that they had no way of realistically paying back in the short term.

As a result, many consumers are now in over their head in credit card debt and they are quickly running out of options.

Paying Credit Card Balances with other Credit Cards

It only makes sense that using one credit card to pay another credit card’s payment each month is a disaster in the making. If you have resorted to this action, then perhaps it’s time to realize that there are bigger problems at hand. If your debt is too much to handle it may be time to talk to a non-profit consumer credit counseling agency, as they may be able to help you identify your money mistakes and put you on a plan to begin paying off your debt.

Transferring Credit Card Balances

If you want to use one credit card to pay off another, make sure the balance transfer offer is attractive and make sure that the balance transfer fee is reasonable (three percent or less of your transferring balance). In addition, get a game plan in place for paying off your debt, and take measures to ensure that you don’t simply begin spending again on the card’s that you have transferred.

APR 101: What you need to Know

Introduction

One of your responsibilities as a credit card holder is to fully understand your credit card.

Although the CARD Act certainly has helped protect consumers regarding their rights, it is still ultimately up to us, the cardholders, to understand the terms, rates and conditions of our credit cards so that we can always make the best decision regarding our credit.

One of the most important aspects of any credit card is the interest rate, or the APR. Sure, you think, I know my card’s interest rate, so I’m covered.

But it may not be as simple as that.

Understanding your credit card’s interest rate is not quite as cut and dry. Here are a few questions you may have regarding the interest rate on your card:

• What is the APR?

The annual percentage rate, or APR, is what you want to look for when determining your card’s interest rate.  Although the APR is generally straightforward, it may be of either the fixed or variable variety. A fixed interest rate will not change unless it is a promotional rate or if you fail to meet your cardholder terms and conditions, while a variable rate is one that will change and is often tied to the prime rate.

• Can my card’s APR change at any time?

The only way your card’s fixed APR can change is if the credit card company provides you with written notice of the change. A variable APR, however, can change at any time, so you will need to keep an eye out for any rate changes.

• What is a default APR?

A default APR, which will be clearly listed alongside your card’s APR in the terms and conditions section of your credit card statement, is charged when you fail to meet your cardholder obligations. For example, your credit card company may charge you a default APR if you are more than 60 days past due on your account. However, the default APR can only be charged on future purchases, and you can opt to cancel the card and pay off your balance at the previous APR if you feel the default APR is too steep.

Where Identity Theft Takes Place and what you can do to Protect Yourself

Identity Theft

Identity theft can take place almost anywhere, thanks to advances in technology and the increasing diligence of identity thieves. Because of the growing problem of identity theft in America, there is a good chance that, you, too will become the victim of identity theft at some point in your life.

However, even given the rampant incidences of identity theft, there are precautions you can take to better protect yourself from becoming a victim. One of the best ways to prevent identity theft is to simply become aware of the many ways in which identity thieves have found to steal your identity.

Here are some of the ways identity theft happens:

• Rooting through your trash – Yes, this is one of the most common ways identity thieves get a hold of your credit card information. The easiest way to ensure that a thief doesn’t come in contact with your personal information is to shred everything before it hits the trash.
• Fooling you through email – Many identity thieves are sending bogus emails to a great number of people, posing as their creditor and asking for information to verify an account. Always remember that your credit card company will never send you an email asking you for any type of personal information.
• Fooling you through the Internet – The next time you shop at your favorite online retailer, make sure the website address is legitimate, as there have been identity thieves that have actually produced copycat websites that look just like a trusted website, but are set up to do nothing more than steal your credit card information.
• Stealing your purse or wallet –  It begs repeating, but it is vital that you keep your wallet or purse close at hand anytime you leave the house. Most identity thefts merely take advantage of a good opportunity; namely, an individual that leaves his or her wallet or purse unattended.
• Skimming your credit card information – The next time you hand over your credit card to a waiter or sales clerk, pay close attention to where they are taking your card. Small devices, called skimmers, now enable identity thieves to quickly scan your credit card information before you even know it.

Are 0% Credit Cards Always the Best Choice?

Choosing Credit Card

You open your mail to find a very attractive 0% credit card offer staring you right in the face. You may automatically think you have found the answer to your high interest rate cards, but is a 0% card always the best choice?

Credit cards that offer 0% introductory rates are great for some consumers; however, if not used correctly, they are not quite as good of a deal as consumers may think.

Beware of Balance Transfer Fees

Although you may be offered a 0% credit card balance transfer offer, it is important to realize that there may be strings attached to this offer. In particular, most credit cards that offer 0% introductory rates also charge balance transfer fees.

Balance transfer fees are often charged in one of two ways: as a flat fee or as a percentage of the transferred balance. It is wise to research the balance transfer fees on a 0% credit card, as they can vary widely.

Consider if you are transferring a $10,000 balance: with a three percent fee you will be charged $300; at five percent that number jumps to $500. In other words, 0% percent may sound fantastic until you consider the related costs of transferring balances.

Consider the Term of the Introductory Offer

Consider the length of your 0% introductory rate when applying for a 0% credit card, as it could determine whether the offer is right for you or not. In particular, take a good look at the card’s rate once the introductory period has expired.

For example, if you are transferring a large balance, paying a balance transfer fee and cannot pay off the balance during the introductory period, you may also be socked with a high interest rate, thereby leaving you little options but to pay off the balance at the current interest rate or transfer your balance to yet another card.

In conclusion, it may be worthwhile to transfer your balances onto a 0% credit card, but only after you have considered all of your options and all of the related fees and expenses.

Is your Beloved Store Credit Card Costing you Big?

Introduction

You love your store credit card. You are loyal and so are your shopping habits. You use your store credit card frequently and you always take advantage of those special deals reserved just for you, the cardholder.

But is your store credit card really all it’s cracked up to be?

Many of us take out store credit cards because it is an easy way to get the best coupons and deals. After all, retailers generally reserve their best offers to their credit card holders.

However, your beloved store credit card may be costing you – even if you’re not aware of it.

Here are some factors you may want to consider next time you pull your favorite store credit card out of your wallet:

• Interest rate – Store credit cards are notorious for their high interest rates. In fact, store credit cards feature some of the highest interest rates around – often anywhere from 18 to 23 percent. Before using your store credit card, do your homework and see what kind of interest rate is attached to your credit card.
• Deferred interest – Many store credit cards offer special promotions with deferred interest – particularly on larger purchases. Although this may sound like a great deal at first glance, consider the downside to this type of offer. In particular, it is quite common for a retailer to tack on all the interest that was originally deferred if you fail to pay off the purchase during the promotional period. In other words, your deferred interest charges could end up costing you big in the end. Pay close attention to any deferred interest or deferred payment promotions and always make every effort to pay off these purchases before the promotional period ends.
• Coupons and special promotions – are they worth it? – One of the best reasons to own a store credit card is the coupons and perks that go along with it. However, if you fail to pay off your purchase in full before the end of the billing cycle, the amount you will pay in interest charges will almost certainly negate any savings you enjoyed. In other words, don’t count on saving any money unless you are prepared to pay off the account in full.

The Future of Managing Multiple Credit Cards

Identity Theft News

Are you managing multiple credit cards? Do you want to find an easier way to manage your credit?

If so, you may find a new design that will transform your credit card into a money manager quite practical. This new design, in short, will change the way electronic money transactions take place.

The Introduction of Card 2.0

Simply put, your ordinary credit card may, in the future, feature a paper-thin computer that will allow you to easily and effortlessly manage your credit.

The design, which will be referred to as Card 2.0, will be fully programmable and rewritable. Any type of information, including account information and payment information, can be changed by the user at any given time.

Recently unveiled at the DEMO Fall 2010 show in Santa Clara, California, this specialty consumer credit card will feature several buttons; each button is linked to a specific account. To use, simply press the button on the card that corresponds to the correct credit card account.

Once the button is pushed, the purchase will be deducted from the corresponding account. The account information is written onto the electronic stripe of the card.

Hidden and your Privacy

Card 2.0 will have another application, called Hidden, which may address problems with credit card fraud and identity theft. Hidden will feature five buttons on the face of the card. The display on the credit card will hide a portion of the credit card number and in order to fully view the credit card number, the user will need to enter a personal code to unlock the entire credit card number.

Once the code has been entered, the full credit card number will be written onto the electronic stripe, thereby allowing for in-store transactions.

In addition, the card’s numbers for Hidden will be erased from the electronic stripe, thereby protecting the consumer until the personal code is entered once again.

Card 2.0, although not currently available, may be a catalyst for changing the way we handle our credit and how we protect our personal information.

How to Avoid Credit Card Fees

Introduction

Sure, the new CARD Act has done a lot to reduce the amount of money we pay out in credit card fees. But, the reality is that there are still plenty of ways in which credit card companies can still charge you fees; fees that may not seem like much until they start adding up, day after day, month after month.

Let’s start with the obvious: if you pay your credit off, in full, each month, you won’t have to worry about pesky finance charges. Unless you are certain that you can pay off your balance in full, don’t charge it! Many of us have found ourselves in the unfortunate situation of not being able to pay off our credit card balances in full each month and end up with mounting debt. In addition, pay close attention to your card’s billing cycle and your due date, and plan to pay the bill at least five days before the due date to avoid any finance charges.

However, in addition to finance charges, you may be paying other numerous fees for your credit card:

• Annual fee – The simple fact is that you don’t need to pay an annual fee for the privilege of accepting a credit card. Although some individuals accept an annual fee because of other rewards and incentives offered by certain credit cards, in general you should not have to pay an annual fee on a credit card. If you have a good credit history with your credit card, chances are you can negotiate to have this fee removed.
• Cash advances – Cash advances should not be used, if possible. First of all, they come with exorbitantly high interest rates; second of all, there are often fees associated with them. Avoid them at all costs and you’ll be much better off.
• Balance transfer fees – Although it may be hard to do, many creditors are now offering fee-free balance transfers. Considering that balance transfer fees may cost as much as 5 percent of the balance of the transfer, this could end being quite a costly fee for you.

Is a Credit Card Alternative Coming to a Convenience Store near You?

News

Today’s consumers are changing the way they shop, thanks in part to the effects of the recession and the credit card crisis.

In fact, more and more consumers are either not using credit cards or unable to use credit cards. As a result, many individuals may have trouble when it comes to paying for everyday purchases.

Changing the Way we Make Purchases

The nationwide convenience store chain, 7-Eleven, has recognized this problem and, as such, developed a new payment system that will enable consumers to pay for everyday purchases – even online purchases – without a credit card and without taking on additional debt.

The program, which will be called PayNearMe, will allow consumers to pay for many types of purchases with cash at such large retailers as Amazon.com.

7-Eleven will allow consumers, through their stores, to make these cash purchases, thereby providing consumers with more options when it comes to making online purchases. PayNearMe is designed to give consumers, whether or not they have access to credit cards, the opportunity to make purchases.

Underbanked Consumers

Convenience Store News recently reported that nearly 25 percent of all U.S. households are considered underbanked by the Federal Deposit Insurance Corporation; this number accurately reflects the number of Americans that typically do not have access to credit cards and other types of credit.

The PayNearMe system will allow consumers to reload their prepaid accounts at their local 7-Eleven with cash. Once the account has been funded, the consumer can then make purchases just like they would with a credit card.

7-Eleven is expected to bring PayNearMe to many of its stores. In addition to the ability to make online purchases, consumers with a PayNearMe account will be able to purchase passes for public transportation, money transfers and insurance products, just to name a few.

Although PayNearMe was originally designed for individuals who do not have access to credit, it has become increasingly clear that many consumers may use the service because they simply don’t want to rely on credit cards or take on more credit card debt. Much of this new way of thinking is a direct result of the nation’s economic problems of the last couple years.