Credit Card Quick

Is now the Time to Transfer your High-Interest Credit Card Debt?

Choosing Credit Card

You may be receiving great balance transfer offers in the mail as of late, and you may be inclined to accept one of them and transfer your other higher-rate balances in an effort to lower your monthly payments and streamline your credit card debt.

However, just like any other financial decision, it is always best to look at every factor when considering if a balance transfer offer is right for you, or if it is the right time to accept one of these offers.

The following is a checklist that you may use to decide where the balance transfer offer is right for you:

• Introductory rate period – Balance transfer offers typically come with a low introductory rate that is designed to lure you into accepting the card. In fact, you can usually score a zero percent introductory rate when you accept a balance transfer offer. However, you will want to focus on the length of the introductory period to determine if transferring the balance will work for you. In other words, it is best to determine whether you can realistically pay off your balance during the introductory period, as the default interest rate after the introductory period ends will likely be much higher, thereby putting you into the same situation as you were before you accepted the balance transfer offer.
• Consider whether the low introductory period will counteract the balance transfer fee. Most balance transfer offers come with a balance transfer fee, which is usually a percentage of the amount transferred. This fee, which is usually about 5 percent of the transferred balance, can be quite a chunk of change. Therefore, it is important to consider whether transferring your balances will make financial sense. Consider the interest you will pay on your credit cards if you do not make the balance transfer, and then consider the amount of the balance transfer fee. You will quickly be able to determine whether it will benefit you to transfer your higher interest rate balances.

How your Credit Card may Protect your Purchases

Introduction

There are many reasons why it may be a smart move to make purchases using a credit card, but one of the most important may be because of the protection credit cards may offer buyers.

Most of the major creditors now offer something called “purchase protection,” which is essentially a feature that protects your purchases and provides a peace of mind.

Although purchase protection is offered by the major creditors, the truth is that few people actually take the time to learn about this feature, and instead only focus on the APR and rewards of a credit card. Although the general terms and conditions vary from one creditor to the next, the goal is generally the same: to offer you protection on your purchases.

• Time Frame – Purchase protection typically protects your purchases from accidental damage, loss and vandalism. Pay close attention to the payout terms of your card’s purchase protection, as the time frame during which you can make a claim will vary. The time limit for most purchases is between 60 and 90 days. In other words, your purchase is protected through the card’s purchase protection feature anywhere from 60 to 90 from the date of purchase.
• Payout – Another feature of purchase protection that may vary from one creditor to the next is the payoff amount. American Express, for example, covers purchases of up to $1,000 per occurrence or $50,000 per member account per year, while Visa’s Signature card is $500 per occurrence and an annual maximum of $50,000.
• Terms and Conditions – Each creditor’s terms and conditions vary widely, so take the time to thoroughly read what’s covered and how you must go about making a claim. Some creditors, for example, will require you to make a police report in the event of a theft, for example.
• Proof of Purchase – Although your purchase is recorded on the credit card statement, it is still very important that you hold onto your purchase receipt from the retailer so that you will be able to verify the date and the purchase price of the item in question.

Forget the Credit Card: Use your Phone!

News

We all knew it was coming: credit cards may be quickly becoming outdated. Instead, those smart phones that seem to be with us nearly every waking moment of our day may very well turn into our source for credit card purchases.

Called MobilePay, this new technology will allow consumers to pay for items by credit card without having the actual card with them. MobilePay, in fact, will be an iPhone application that will automatically authenticate with various vendors to transfer payments directly to a user’s credit card.

Testing it Out

Although MobilePay is not available just yet, it has shown promise in closed beta tests and was recently announced at the TechCrunch Disrupt in San Francisco.

Vendors from all over the world will be able to partner with MobilePay, thereby allowing them to make purchases through their iPhone application. What’s more: users will not have to install any new hardware to technology to use MobilePay.

How to Use it

To begin using MobilePay, consumers will simply link their credit card or bank cards with their MobilePay accounts and then activate and use the app anywhere the technology is offered. The user simply enters the amount of money they owe the vendor into their phone (and a tip or cash back, if desired) and then sends the information.

Safety Considerations

The platform for MobilePay will be preloaded; therefore, it will be able to send an authentication signal to the particular vendor so that they can authorize the payment.

MobilePay will also be able to offer rewards to customers who use the service regularly, thereby giving them an incentive to use this technology. For example, it may be able to offer consumers cash back rewards or discounts for future purchases.

MobilePay is the brainchild of a California-based company called MobilePay USA. The company was launched in May of this year and has since operated in stealth mode.

CARD Act Loopholes you Need to Know About

Introduction

All credit card holders will certainly benefit from the CARD Act and the protection it offers them. However, just like any other type of legislation, creditors have found loopholes in the CARD Act.

What does this mean? In essence, it means that you, and you alone, are ultimately responsible for understanding how your credit card works, as well as the card’s terms and conditions.

If you are thoroughly confused (who isn’t?) about the CARD Act and the ways in which you may not be covered, here is a list of things you may want to watch for:

• Your interest rate may be increased during the first year, in certain cases – Although the CARD Act prohibits creditors from raising your card’s interest rate during the first year, there are exceptions to this rule. Your interest rate can increase: if you have a credit card with a variable interest rate that is tied to an index; if your account is 60 days past due; and if your interest rate is tied to a promotional rate.
• Your credit card account may be closed, without warning – Your creditor does not have to provide you with notice if they decide to close your account, reduce your credit line or cancel any of your credit card privileges. The only circumstance under which they must provide you with notice is when they impose a penalty for exceeding your credit limit.
• If the creditor imposes a rate increase, you cannot reject it – You can certainly close the account and pay off your balance under your current interest rate, but you cannot reject the rate increase on future purchases.
• If the terms of your credit card are disclosed in the account-opening table, you do not have the right to reject the changes – You also do not have the right to reject an increase in your minimum payment amount.
• THE CARD Act cannot put a cap on penalty interest rates – Although the CARD Act protects consumers from an increase in interest rates without warning, creditors are under no obligation to cap their penalty rates. In other words, it is not out of the ordinary for a creditor to change a 10 percent interest rate to nearly 30 percent if a penalty is imposed.

Your Guide to a Healthy Relationship with your Credit Cards

Introduction

You can have a healthy relationship with credit cards! You can use them to your advantage without becoming embroiled in credit card debt! All it takes is a bit of forethought and a firm understanding of the pitfalls of credit card debt.

• Begin by understanding the current credits you have and if they are still working for you – The best first thing you can do is to take an inventory of your current credit cards to make sure that they still have what you want and need. Take a look at the interest rate on your credit cards, as well as any other thing you may need to use the credit card for, including balance transfer offers, credit card insurance and protection and rewards features.
• Consider your needs and choose a credit card based on them – In order to guarantee that you have found a credit card that’s right for you, you must first consider your credit card wants and needs. For most individuals, a good credit card with a low, fixed interest rate will be suffice, while some individuals may find value in rewards and cash-back credit cards. Of course, the credit card you choose will be a personal decision, so take your time to explore your options when it comes to credit cards.
• Make it a point to thoroughly understanding the rates, terms and conditions of your credit card – Before you accept a credit card offer, take the time to read and understand every aspect of the credit card; otherwise you could be setting yourself up for disaster. If you are accepting a card with a 0% introductory interest rate, for example, make sure you understand the terms of the promotional rate and the rate you will be charged once the promotional rate has ended. If you accept a rewards credit card or a cash-back credit card, read the fine print so you can be sure you understand the best ways to earn points and redeem them. Although the CARD Act has made credit card companies become more forthright when it comes to their terms and conditions, it should never replace your responsibility of understanding the card and its terms and conditions.

Facts about Credit Cards and your Credit Score

Credit Score

Do you think you know the secret to a great credit score? Most of us certainly seem to think so, but there are quite a few factors – many of which we are not aware – that can have a big impact on your credit score.

• To activate or not activate – Many individuals think that if they don’t activate the credit card they receive in the mail then it won’t show up on their credit score. Unfortunately, this is not the case, as the account shows up as being active, even before you activate it. So if you change your mind about a credit card somewhere between applying for the card and activating it, know that the account has already shown up on your credit score. Your best bet is to make sure you take the time to understand whether a new credit card is right for you before you apply for it.
• What you don’t know about can hurt you – If you think you are in the clear because you pay your bills on time, you may be wrong! Many people have incorrect information on their credit reports that ultimately damages their credit scores and their chances of getting competitive interest rates on everything from cars to homes. Your best bet? Always take the time to check your credit score to ensure that the information that is on it is accurate. Most financial analysts recommend checking your credit score at least once a year.
• Paying your bills on time are just one part of the equation -  You pay all of your credit card bills on time each month, so you must have great credit, right? Most people don’t realize that bill payments are just one part of your credit score. Another large part of your score involves the amount of open credit on your credit score. In other words, if your credit cards are maxed out, regardless of whether you are able to pay your monthly minimum payments, your credit score may take a hit because you have very little available credit.

You’ve Consolidated your Credit Card Balances: Now What?

Credit Repair

If you have great credit, but too much credit card debt, you may have already considered consolidating your credit card debt. Consolidating your credit card onto a loan or credit card with a competitive interest rate may be a good idea, provided you don’t find yourself in the same position in a few more years.

Many individuals choose to consolidate their credit card debt in an effort to lower their interest payments and to ease the burden of paying multiple bills each month. For those reasons, it is often quite advantageous for individuals to use the services of credit card consolidation.

However, unless consumers make a game plan once their consolidation takes place, they may be doing little more than freeing up their credit cards to begin spending once again.

One of the main problems with credit card consolidation and balance transfer loans is that, once consumers pay off their debt, they begin, once again, spending on the credit cards that they recently paid off.

With that said, it is usually a good idea to have a game plan in place so that you can better deal with your credit card consolidation in a responsible fashion:

• If you know that you will likely begin spending on those credit cards once the consolidation has taken place, cancel the cards. Some credit card analysts tell individuals to not cancel any accounts because it will affect their credit score, but the truth is that a small hit on one’s credit score is better than mounting credit card debt. In other words, canceling cards is always the lesser of two evils if you have trouble controlling your spending.
• Set up a repayment plan and stick to it. You can begin making a considerable dent in your consolidation loan or balance transfer if you calculate how much you can afford to pay each month and then stick to your plan. There is no better satisfaction than watching your credit card balance dwindle, month after month.
• Set up a reasonable household budget and take the time to find out why you overspent on your credit cards so you begin to see where your money is going every month and how you can avoid going back to that situation.

Holiday Credit Card Spending, Simplified

Introduction

Don’t let the holidays get the best of you this year. Instead, set up a realistic game plan that will have you relaxing in the near year instead of dreading it.

In particular, credit card spending over the holidays doesn’t have to be stressful. In fact, there are a number of ways you can enjoy the convenience and practicality of credit cards without getting bogged down in holiday debt:

• Make a list (and check it twice!) – If you come armed with a detailed list when you walk into the mall or your favorite department store you will be less likely to make impulse purchases. Before you even begin shopping, promise yourself that you will stick to the list. Once you master the list technique, you will find that your holiday budget will be better kept in check.
• Resist the department store impulse – You will be approached numerous (and I mean numerous) times by well-meaning retail employees who offer to save you loads of money if you open a retail credit card. But beware of these offers! Often times, the interest paid on these types of purchases far exceed any money you would save. Instead, whip out your low-interest credit card and save yourself a lot of time and money.
• Calculate how much money you will have to spend on holiday gifts and plan your spending based on that. If you divide the amount of money you have into the number of people for whom you must purchase presents, you will not have to rely on credit cards to make up the difference. Simply live by the motto: “Don’t spend more than you make” and you can’t go wrong.
• If you make mistakes and end up spending too much, don’t ignore the problem. Instead, take the time once the holidays are over to set up a reasonable repayment plan so that you won’t be haunted by holiday’s past for the better part of 2011.
• It can be said enough: compare prices and shop around! Get an early start so you have the time to comparison shop and you will be pleasantly surprised at all the money you were able to save over the holidays!

How to Secure a Credit Card when you have Bad Credit

Credit Repair

The recent report is staggering: nearly one quarter of Americans have credit scores of less than 600. Credit scores in this range are considered to be very low; although when you consider the number of foreclosures and bankruptcies plaguing America, it becomes quite clear why so many Americans are in this difficult financial position.

A credit score of less than 600 generally means that your chances of obtaining any type of loan or credit are slim to none. However, if you are looking for ways to build your credit back up and begin the process of repairing your credit score, you do have options when it comes to securing credit.

• Look at cards that marketed to people with “fair” or “poor” credit. Although there is a chance that you may not be approved for one of these credit cards, it is a good place to start. However, don’t keep applying if you get turned down, as too many credit checks on your credit report will further lower your score.
• Look at secured credit cards. Secured credit cards are specifically designed for individuals with either no credit or poor credit. A secured credit card works like a debit card, of sorts, as you can only spend as much as you have in a special savings account. The money that you supply to the credit card company acts as their insurance in case you fail to pay your card. In other words, if you supply the credit card company with $500, you will have a credit limit of $500. Make frequent charges on your credit card and pay it off in full each month to begin building a strong credit history. Remember: secured credit card companies report to the major credit reporting agencies in much the same way as traditional credit card companies.
• Ask a spouse or family member to co-sign a credit card for you. If you have experienced a blow to your credit because of unforeseen or unavoidable circumstances, you may very well have a sympathetic family member who is willing to help rebuild your credit by co-signing a credit card for you.

Seniors and Credit Card Debt

Credit Card Debt

Credit card debt doesn’t just affect younger consumers. In fact, recent statistics show that consumers over the age of 65 are spending more on credit cards than ever before. Unfortunately, seniors are also apt to be living on fixed incomes.

Because of this, it is important to consider credit card debt and seniors. If you have older loves ones in your life, it may be a good idea to ask them about their credit card debt, as it can become a huge issue for individuals living on fixed incomes.

Approaching your Aging Loved One

Although it may be difficult to approach your aging loved one about credit card debt, as this could signal to them a loss of independence or privacy, ensure them that you have only their best interest at heart. If you notice that the senior in your life is purchasing things you may not think he or she can afford, or if you are aware of mounting medical bills (a signal that he or she may be forced to rely on credit cards because of high medical bills), it may be time to talk.

Another problem with seniors and credit card debt is that they may be unaware of the interest rate on their credit card, thereby creating problems in terms of paying off their debt.

Although it may not seem like such a big deal if your aging loved one is incurring a great deal of credit card debt, the truth is that this debt may be causing them a great deal of emotional stress and anxiety, especially if they are being hounded by creditors.

Providing your Aging Loved One with Financial Assistance

If you are able to do so, help your aging loved one pay off some of all of their credit card debt. You may also want to take the time to help them work out a budget or, if your loved one feels uncomfortable talking to you about finances, encourage them to talk to a financial counselor or non-profit consumer credit agency.

Remember that credit card debt can affect nearly anyone at any time in their lives, including seniors, so it pays to keep the lines of communication open with your aging loved ones so they don’t have to deal with the stress and anxiety of credit card debt.