Credit Card Quick

Your Legal Rights as a Credit Card Holder

News

The federal government has set up a number of laws that are designed to protect the rights of credit card holders. Unfortunately, though, many consumers are unaware of these laws or their rights under the laws.

Here is a list of the laws through which the federal government protects credit card holders and consumers:

• The Fair Credit Billing Act – The Fair Credit Billing Act, which protects most cardholders, is a law that protects you from inaccurate or unauthorized charges on your credit card statement. Through the Fair Credit Billing Act, most consumers are responsible for just the first $50 of unauthorized charges. In addition, this Act protects consumers from paying for merchandise that never arrived; for any goods that were not what was promised; and double charges for goods or services.
• The Fair Credit Reporting Act – The Fair Credit Reporting Act, which was amended by the Fair and Accurate Credit Transactions Act of 2003, protects you from inaccurate or incorrect information found on your credit report. Within this Act, consumers have the right to dispute inaccuracies, which then have to be investigated by the appropriate credit reporting bureau within 30 days. Any information that cannot be verified during this time must be removed from your credit report.  This Act also allows you order a free copy of your credit report if you have been denied credit.  Finally, this Act also prevents just anyone from looking at your credit report; only those with a need (a creditor, insurer or landlord, for example) can gain access to your credit report.
• Truth in Lending Act – The Truth in Lending Act prohibits creditors from offering credit to consumers unless all terms, rates and conditions are clearly outlined.
• The Credit CARD Act – One of the newest forms of federal legislation regarding credit cards, the CARD Act is a far-reaching piece of legislation, although some of the highlights include: creditors cannot raise your interest rate without at least 45 days’ notice; double-cycle billing is prohibited; and your creditor cannot raise your interest rate on existing balances if you continue to meet the minimum payment and due date requirements set forth by the creditor.

How to Fight Inaccurate Information on Your Credit Report

Credit Score

Your credit report is like an outline of your credit life and history. A good credit score can afford you the ability to rent an apartment, lease a car and purchase a home. A poor credit score, on the other hand, can limit your opportunities and leave you with loans bearing high interest rates.

Because of the importance of a strong credit score, it is vital that you order a copy of your credit report, from all three credit reporting agencies, at least once a year so you can thoroughly review your credit report. If you find any inaccuracies or omissions, it is important to immediately contact the appropriate credit reporting agency.

Here’s how to do it:

• As soon as you spot an error, contact the appropriate credit reporting agency and submit a dispute. Provide the credit bureau with an explanation, in writing, of what you believe is inaccurate information. Any information you can provide the bureau with, such as credit card statements, to support your claim, will be helpful. Don’t send originals, though; make copies and keep the originals. Send your letter through certified mail and ask for a return receipt. Before you send any information, make copies of everything, including the letter, for your records.
• Under the Fair Credit Reporting Act, the credit bureau must investigate your dispute within 30 days. If they are unable to verify the information contained in the report, they must remove it from your credit report.
• Once the investigation has been completed, the credit bureau in question must then provide you, in writing, with the results of their investigation, along with another copy of your credit report showing the updated information.
• If you request it, the credit bureau must also provide an updated credit report to anyone who received your credit report in the last, six months. In addition, if an employer requested a copy of your credit report in the last, two years, you can request that the bureau send them a copy, as well.
• If you are unable to resolve a dispute with the appropriate credit bureau, you can still request that the bureau include the copy of the dispute in all future credit reports.

Your Identity is Stolen: What Should You Do?

Identity Theft

If you find your identity has been stolen, it is important to act swiftly to minimize damages. But where do you start?

1. Contact your local police department and report the theft. Once the theft has been reported, the police should be able to provide you with a copy of the report. A copy of a police report will become very important as you and the credit bureaus and creditors perform investigations regarding the identity theft.
2. Contact all three credit reporting agencies (TransUnion, Experian and Equifax) to report the theft. They will likely request a copy of the police report, so send them along. Each of the credit reporting bureaus will do a couple things at this point: They will freeze your credit report and place a fraud alert on it; and they will open a fraud investigation on your behalf. Under the Fair Credit Reporting Act, the credit reporting bureau must investigate the claims within 30 days. Any information they find on your report that cannot be verified with the appropriate creditors must be removed within these 30 days.
3. In addition to sending the credit reporting agencies a copy of the police report, send a written letter, as well, stating in clear terms what happened. Often times, a letter from you will provide future creditors with information needed to understand your credit status.
4. Any creditors or lenders associated with the identity theft should be immediately contacted. They, too, will likely want a copy of the police report. They will also typically perform their own investigation of the matter. Ask the credit reporting agencies if they will also contact the appropriate creditors and provide them with information regarding their investigation.
5. You may be unable to open new credit accounts or take out new loans during this time. Although this may be quite inconvenient, it is important to allow the credit bureaus and the police to finish their investigations and clear your name of the fraud.
6. Going forward, it is important to keep the fraud alert on your credit report and check your credit report frequently over the next year.

Do I Really Need a New Credit Card? Important Questions to Ask Yourself

Introduction

You open to the mailbox to find a fantastic credit card offer staring you in the face. Should you or shouldn’t you?

Before you apply for another credit card, it pays to ask yourself a few questions so you can be sure you are making the right decision:

1. Do I really need another credit card? Are you financially stable? What is your current debt load? Is your credit strong? All of these questions must be answered before you can answer this first question. If your finances are screaming “NO!” when you open a new credit card application, it may be best to pass and concentrate on the credit cards and related debt you already possess.
2. Does this card satisfy my spending habits? Because so many of today’s new cards are of the rewards variety, it is very important to understand what you need in a rewards card. And in order to do this, you need to take a look at your spending habits. From gas rewards to airline points and cash back programs, there is no shortage when it comes to rewards cards, so make sure it fits your lifestyle.
3. What features am I looking for in a credit card? If you merely want a credit card that allows you to rack up rewards points, your answer to this question is pretty cut and dry. However, if other factors are important to you, such as promotional rates and balance transfer fees, you will want to do a bit more investigating to make sure this new credit card has everything you need in terms of features.
4. Is this card all it’s cracked up to be? Sure, promotional offers look fantastic at first glance, but it is through the terms and conditions of the card that you really begin to understand the nuts and bolts of the offer. If you do nothing else, always (and I mean always) take the time to read the card’s terms and conditions before signing on the dotted line. If you don’t understand something, by all means call the credit card company and ask. But never, ever sign up for a card you don’t fully understand.

Can your Credit Card Company Really Dictate What you Can’t Buy?

News

Can a credit card company dictate what you purchase on your credit card? In the case of American Express, it seems they can.

American Express recently banned purchases of medical marijuana with its credit cards, and the resulting debate has brought the idea of credit card companies and the authority they should carry when consumers make purchases deemed questionable back into the spotlight.

Some of the purchases banned by some credit card companies include: gambling chips, donations to controversial non-profit organizations, medical marijuana and, in some cases, pornography.

Most credit card companies say that they are simply protecting themselves against legal liability, but consumer groups say that they are simply infringing on consumers’ rights and shouldn’t play the morality card.

John M. Simpson, of the consumer group Consumer Watchdog, says: “It seems to me that credit card companies are imposing their moral values on the world.”

It appears that, among the industry’s biggest companies, that American Express is the most conservative of them all, as it has banned medical marijuana in all 16 states that have legalized it. They have also banned online pornography.

Inconsistencies in Credit Card Rules

Some critics, however, note that there is a considerable amount of inconsistencies in these rules. For example, some cardholders don’t allow its credit card customers to charge gambling chips, but they can use the casino’s ATM to get cash advances at casinos.

A MasterCard spokesman has adopted a number of policies to “combat illegal or brand-damaging behavior.” American Express states that it “abides by federal law and prohibits transaction where the risk of dispute is unusually high.”

Adhering to Federal Law, or Making Moral Judgments?

In addition, American Express bans online pornography sales with its credit cards because they want to fight sales of child pornography. As such, they ban all pornography sales as an “additional safeguard.” Medical marijuana is also prohibited because the company says it is “adhering to federal law.” MasterCard and Visa are expected to follow suit.

American Express has banned online pornography purchases since 2000 because they considered it to be a “risk-based decision” because they had to deal with a number of disputed transactions prior to that date. They consider their decision to be based on risk alone; that it is “not a moral judgment.”

How to Negotiate your Way to a Lower Rate

Introduction

You negotiated a deal on your new vehicle, you negotiated your television purchase, and you even negotiated the price of your home. But what about your credit card rate?

The best thing about today’s credit card industry is that they are now competing for new customers. In fact, a consumer with a strong credit score has his or her pick when it comes to credit card rates. In other words, don’t go for the first offer that comes your way. You can – and should – negotiate your way to a lower rate.

Make a Phone Call

If you receive a credit card offer that looks enticing, but the rate could be lower, don’t hesitate to call the credit card company and ask them if they can do better. If the customer service representative doesn’t want to entertain a lower rate, ask to talk to his or her supervisor.

When calling the credit card company, simply say, “I really like the features of this new card, but I have also received other credit offers with lower rates. What can you do to beat these offers?” Simply by threatening to take your business elsewhere you can bet a credit card company will make you a better offer.

The U.S. Public Interest Research Group found that, in the last several years, more than half of the customers who requested a lower rate got one. And the average consumer saw a decrease in their APR from 16 to 10.4 percent.

A Strong Credit Score Remains King

It is important to understand, however, that the only way you can expect to negotiate a lower rate is if you have the credit history to back up your request. Credit card companies are more than willing to negotiate rates and snag a great customer, provided the customer has excellent credit and a strong history with the credit card company.

In short, a lower interest rate can save you hundreds of dollars in unnecessary finance charges each year, so you should be negotiating every point in interest so you can be sure you are holding the best card with the best rate.

Little Known Facts about Debit Cards

ATM

Your debit card may be your favorite piece of plastic in your wallet, and for good reason. Debit cards have a number of benefits and conveniences, and many people use them to keep them on track when it comes to managing their spending.

But do you know everything about your debit card? Chances are you don’t. It is important to understand that, although many people use it like they would a credit card, they have very different features and protections than credit cards.

The following is a list of little-known facts about debit cards that you need to know before you pull it out of your wallet for your next purchase:

• Your debit card may have theft and fraud protection, but you have to know how to use it – Your debit card issuer may offer you protection against theft and fraud-related happenings, but don’t expect to be covered unless you sign your name. In other words, pin purchases are likely not covered when it comes to fraud and theft protection. In addition, although federal law provides a personal liability limit of $50 for credit card customers, the protection offered for debit cards is much more limited and unclear. Before using your debit card, make sure you understand the personal liability limits set forth by your debit card issuer regarding theft and fraud.
• Your debit card may prohibit you from spending too much -Although most people understand that they have a daily limit on the amount of money they can withdraw from the ATM with their debit card, not many people are aware that they may also have a daily spending limit on their debit card. In fact, it is quite common for daily spending limits to exist on debit cards, so it pays to ask your debit card issuer about your daily spending limit so you won’t find yourself in a situation where your debit card is declined. It is also important to understand that daily spending limits often vary between customers based on their activity, balance and spending.
• Your debit card may be rejected if you spend unexpectedly – If your bank detects abnormal spending patterns, your card may be rejected. In other words, if you frequently spend locally and then decide to take a weekend trip across the state, this could raise a red flag with your debit card issuer, thereby resulting in a decline of the sale.
• Your debit card’s balance may not be accurate – Some transactions simply don’t appear right away on your debit card, making your balance seem larger than it really is. This could spell trouble as it may give you a false sense of security and cause you to spend more money than you really have in your account.

The Downside to Debit Cards

ATM

There is a large group of Americans who have taken to using their debit cards on a daily basis. In fact, many consumers have begun using debit cards over credit cards because they feel they can better control their spending using this method. If you are using a debit card, it pays to understand that, although they can help keep us on budget, they can also cause financial trouble. And here’s why:

• You could be more vulnerable to identity theft – Although your debit card may come with its own protection against unauthorized charges, the hassles that would result from your card being stolen are many. In short, consider if someone accesses your account and drains it of your money, you will likely be facing innumerable charges, including bounced check fees and overdrawn fees. Again, your bank will likely help resolve these issues, but having a drained bank account – even for a day or two – could cause serious hassles.
• You could get burned with overdraft fees – Although the Federal Reserve prohibited banks from charging overdraft fees on debit cards purchases as of August 2010, you may have opted for your bank’s overdraft protection feature, which means your bank will extend you a line of credit if you overdraw your account. However, this doesn’t come free, and you could end up paying big in overdraft fees as a result.
• Your recurring payments could become a problem – Many people use their debit cards to sign up for recurring payments, such as for their gym membership or shopping club. However, many people have found that, even after they cancelled their membership, they continued to be hit with recurring payments. It is therefore extremely important to keep an eye on your monthly bank statement when you have recurring payments; or, better yet, opt to pay with a credit card, instead, as you won’t need to worry about overdrawing your account due to unexpected expenses. Keep in mind that using auto bill payments for utility payments could create these same types of problems, as well, so it pays to keep a close eye on your monthly payments, even if they are being automatically debited from your account.

The Importance of Shredding for Your Identity

Identity Theft

What do you do with your personal bills, credit card statements, medical records, and cancelled checks? Do you throw them in the garbage or send them to the shredder?

If you don’t have a good shredder in your possession, you could be setting yourself up for identity theft. In general, if you have something in your possession that you wouldn’t feel comfortable having someone else look at, shred it.

In fact, identity theft criminals need very little information to steal your identity. For example, with your Social Security number in hand, criminals can apply for everything from credit cards to personal loans. And you’d be surprised to see exactly what information your garbage is giving to identity thieves. If you don’t think criminals would go through the effort of diving into your dumpster to retrieve your personal information, think again.

The good news is that purchasing and using a shredder involves very little hassle on your part. Simply by throwing your personal paperwork into a cross-shredder, you can significantly decrease your chances of becoming the next identity theft victim.

From households to businesses, everyone should make a point to shred personal information before discarding it. So, what should you shred?

• Bank statements
• Canceled or blank checks
• Credit card offers
• Credit card statements
• Financial statements
• Personal bills
• Legal papers
• Insurance statements
• Income tax records
• Medical bills

Shredders are a nice convenience, and are priced quite reasonably, too. Most office supply stores offer a nice variety of shredders that range from $20 and up.  Although there are a few shredders that are designed for business use and much more expensive, a general shredder with cross-cut capabilities can do the job.

The difference between a strip-cut shredder and a crosscut shredder is that a strip cut shredder shreds paper into strips. And, depending on the width of the cut strips, the information may still be obtained by the identity thief. A crosscut shredder, on the other hand, cuts the paper in different directions, thereby providing more security. The only other difference in price usually comes down to the number of pieces of paper the machine can take at one time and the size of the shredder’s motor.

What You Need to Know About Credit Card Inactivity Fees

News

With the advent of the CARD Act, many credit card companies had to put on the brakes when it came to over-the-top fees and charges. However, like any other legislation, credit card companies found their share of loopholes and are, once again, hitting customers with new and quite inventive charges. Enter the inactivity fee.

What is an inactivity fee?

An inactivity fee is a new fee that many credit card companies are employing to encourage customers to either start spending or risk losing their account. In short, the CARD Act put a serious dent in the wallets of the credit card companies; in response, they began cutting the dead weight, so to speak. In other words, they are now looking to cut ties with those customers who held a credit card, but did very little spending on it.

Why are credit card companies charging this fee?

Because of the CARD Act, and the poor economy of the last, few years, fewer people have been using charge cards. As a result, credit card companies began imposing inactivity fees to: (a) encourage consumers to start spending on their credit cards again; and (b) generate revenue lost by the legislation of the CARD Act.

How do I know if my credit card company is charging an inactivity fee?

The inactivity fee must be detailed in your card’s terms and conditions, so read them closely. Each credit card will have its own rules regarding inactivity fee – mainly the time that elapses before you are charged this fee – and some cards do not even charge this fee. If in doubt, give your credit card company a call to verify whether they are imposing an inactivity fee.

How can I avoid paying an inactivity fee?

If you have a credit card, but you relegate it to the back of your wallet for use only in emergencies, you could be facing an inactivity fee from your credit card company. Unfortunately, most credit card companies are not willing to negotiate this fee. So to avoid this charge, simply make a point of spending on the card a couple times a year.