Credit Card Quick

How the Downgrade in Nation’s Credit Rating may Affect You

News

Although it may not seem, at first, that the recent Standard & Poor credit downgrade will have a big impact on your life – after all, what exactly does that mean?  But, in reality, a downgrade could mean you will soon be paying higher interest on your favorite credit cards.

In fact, many experts say that the S&P downgrade could result in interest rate increases in as soon as three to six months. How much? Some experts estimate as much as two to three percent.

So, what can you do about these changes that most certainly will take place?

• The CARD Act of 2009 protects us, somewhat, from interest rate hikes. For example, credit card companies cannot hike up your card’s APR on your existing credit card balances unless you fail to pay on time. In other words, NEVER miss a credit card payment or your credit card company!
• Under the CARD Act, credit card companies also cannot raise your credit card’s interest rate on future purchases unless they give you a 45-day notice. It is therefore important to keep a close eye on any information sent to you by your credit card company. In other words, now is not the time to ignore any correspondence you receive from your credit card company.
• If you do receive a notice from your credit card company in the upcoming months regarding a hike in your interest rate, you do have the ability to cancel the card and continue paying off your balance with your current interest rate (provided you pay on time, without fail). If you are a good customer and have a strong history with your credit card company, you may also be able to negotiate a lower rate.
• Beware of signing up for a new credit card in the upcoming months, as the credit card company may try to sneak around many of the CARD Act’s provisions by handing out variable-interest credit cards that don’t have the same rules and regulations as their fixed-rate counterparts. In general, it is best to stay away from credit cards unless they have fixed rates.

Your Key to Successful Rewards Credit Card Spending

Choosing Credit Card

Rewards credit cards are now the most popular type of credit card, by a landslide. Most consumers now understand that there are many ways in which they can benefit from rewards credit cards, thereby making simple, everyday purchases advantageous in the long run.

With that said, there are a number of things to remember when it comes to rewards credit cards to ensure you establish a successful relationship with your rewards credit card:

• If you are considering a rewards credit card, take the time to really consider which type of rewards card makes the most sense for your budget and your shopping habits. For example, if you are a business traveler, a rewards card for airline miles or points probably just makes sense. The best place to research rewards credit cards is online, as there are a number of websites that compare rewards cards, side by side, so you can decide which is best for you.
• Remember that all rewards credit cards are not created equal. Don’t assume that one cash back rewards credit card is going to feature similar features as its competitor. In fact, rewards credit cards can vary greatly when it comes to everything from rewards programs to interest rates.
• Carefully read the terms of your credit card’s introductory offer. Many rewards credit cards will feature very attractive initial terms, such as bonus miles or points, so make sure to take advantage of these offers. For example, some rewards credit cards will offer thousands of rewards “bonus” points simply for spending a certain amount of money during the initial months after you opened the account.
• Carefully read all correspondence from your credit card company. Many rewards credit cards feature revolving promotions that allow you to earn more rewards simply by shopping at certain retailers or at certain types of stores. For example, you may receive notice from your credit card company regarding additional rewards points for charging your gasoline purchases for the month of September. So, take advantage of these offers and maximize your rewards credit card!

The Secrets of Smart Credit Card Spenders

Introduction

Why is it that some credit card spenders can manage their cards so well and make their credit cards work for them, instead of the other way around? What do they know that we don’t?

The secret is that there is no secret! Smart credit card spenders simply live by certain rules; rules that, when followed, allow them to enjoy the many benefits of credit cards, without dealing with many of the downsides. Here are a few examples:

1. Spend only what you have – If you don’t have the money for a new sweater, for example, don’t buy it. Sounds pretty simple, doesn’t it? But the fact of the matter is that millions of Americans forget this basic concept of “spending within your means.” We have become a society of instant gratification, and we all assume we can have what we want, when we want it. But this just isn’t realistic, and it is the reason why American households have, on average, $13,000 in credit card debt. Reevaluate your wants and needs and get your priorities straight before you pick up a credit card.
2. Pay off your balances, in full, each month – This rule, although it goes along with rule number one, is very important because it allows smart spenders to reap the rewards of credit cards without paying costly finance charges. If you think you snagged a deal on those $49.99 shoes, consider how much you really paid for them after you paid interest on them for six months. Not such a great deal after all, huh? If you don’t want to end up a slave to your credit cards, you must make a promise to pay off your balances, in full each month, with no exceptions.
3. Stay away from retail credit cards – Although retail credit cards will suck many spenders in with their promotions, special shopping days and coupons, the truth of the matter is that there is a very good reason why they can offer such great deals: because they earn so much in finance charges! Simply put, the interest rates and high fees associated with retail cards just don’t make them a common sense choice for today’s credit card spenders.

How to Avoid Identity Theft at Retailers

Identity Theft

We all love to use our credit cards at our favorite retailers, but there may be a chance that your next transaction could be compromised by an identity thief. Before you head out the door to go shopping, read this article to learn about some of the ways you can protect yourself at the register.

• The next time you grab a bite to eat, choose to pay for your meal at the register instead of giving your credit card to the waiter. There have been many cases where waiters took credit cards and stole credit card information using small devices called skimmers. You can reduce the risk of this from happening simply by paying for your meal for yourself at the front register.
• When you give your card to a retailer, get it back in a reasonable amount of time. If the employee has it longer than you deem necessary, bring it to the manager’s attention and get your card back ASAP.
• When you have your card in your hand while in line at the register, keep the numbers hidden from other individuals. It is quite common for identity thieves to snap pictures of credit cards using a cell phone; and this act can be completed quickly and go unnoticed by the consumer.
• If a store does not have security cameras at the registers, move on to a different retailer. Although PCI data security standards require retailers to have security cameras at areas where credit card transactions take place, many do not, thereby leaving the retailer vulnerable to credit card theft, especially by employees.
• Avoid leaving a tip on your credit card. Service employees may use this opportunity to add an additional tip, and it often goes unnoticed by the consumer. Instead of leaving a tip on a credit card, opt to instead leave a cash tip.
• If you use an ATM or card reader, check for signs of tampering. In particular, look at the card reader closely and do not use it if you see anything out of the ordinary, such as tape holding it on, as this could indicate the presence of a skimming device.

Why Your Credit Card Company may Decline your Credit Card Purchase

Introduction

Although we all know the biggest two reasons our credit card purchases are declined (we are over the limit or we failed to pay our bill), there may be a few other reasons why your credit card company rejected your credit card purchase.

In short, your credit card company may reject your purchase if they notice anything out of the ordinary about your shopping habits. Here’s what you may need to know:

• Shopping at places you don’t normally shop – For example, if you often shop at a particular drug store, but then switch things up and shop at another one, it may raise a red flag with your credit card company.
• Shopping like a speed demon – If you make several purchases in a short amount of time, this may also raise a red flag with your credit card company. For example, if you make a purchase at your local grocery store, then realize you forgot something and head back in to make another purchase, it may seem odd to your credit card company. Sure, just two purchases probably wouldn’t cause problems, but if you do this a number of times, it certainly will.
• Purchase something really small, and then something really big – Many credit card thieves will make a very small purchase to “test the waters,” so to speak. And then, once they see the credit card is active, they will make a large purchase. Therefore, be careful about purchasing a pack of gum and then immediately purchasing a flat-screen television, for example.
• Shopping far away from home – If you head out on a holiday excursion and use your credit card, your credit card company may be alerted to unusual activity and block your card until they can verify you are, in fact, traveling. It is always best to alert your credit card company before traveling.
• Purchasing things in different areas on the same day – For example, if you fly to Florida, stay there for a layover, and purchase a few things at the airport, only to continue your travel to California and purchase items there, on the same day, your credit card company may find these purchases, in states very far from each other, to be unusual.

Credit Card Companies Absent from College Campuses

News

They used to be a common sight at college campuses across the country: creditors parked along corridors and in common areas, hawking their credit cards. From freebies to easy credit, college students used to have their pick of credit cards, simply by strolling along at their college campus. Today, however, the atmosphere is decidedly different, with the government pulling in the reigns of the credit card companies when it comes to extending credit to college students.

In fact, the number of new accounts opened through colleges or other such higher learning institutions dropped 17 percent in 2010, according to the Federal Reserve Board. In addition, agreements between colleges and credit card companies were down, too.

The CARD Act Consequences

The drop-off in activity was, no doubt, brought on by the Credit Card Accountability Responsibility and Disclosure (CARD) Act. In particular, the CARD Act included language that limited the ability for credit card companies to market to college students. The CARD Act also limits credit card companies from passing out gifts to college students for opening accounts.

Restrictions through the CARD Act

In addition, the CARD Act also requires credit card companies to disclose, on an annual basis, the agreements they made with colleges and related groups. As a result of these new rules spelled out in the CARD Act, many colleges have canceled their agreements with credit card companies who use aggressive marketing tactics. In fact, over the years, many colleges kept this information quiet, as they were getting paid by credit card companies to provide information about their undergraduates. Now, with advent of the CARD Act and better transparency, colleges are rethinking their relationships with credit card companies.

Linda Sherry, national priorities director for the nonprofit group Consumer Actions says, “Just the ‘sunshine’ on the card agreements called for with the public reports is a great way to shame the universities from profiting off of making students debtors, and it seems to be working.”

The CARD Act, although it has cut down on the rate at which credit card companies market to college students, has yet to keep many college students from taking on credit card debt. It appears that the effects of the recession and the fact that credit card companies are simply being more particular when it comes to approving individuals for credit may have more of an impact on college students and credit than a decreased rate of marketing through college campuses.

What You Need to Know About Foreign Transaction Fees

Introduction

If you have plans to travel outside of the county, either on business or pleasure, you will want to educate yourself on foreign transaction fees and the ways in which you can prevent them.

Although credit cards are often considered the easy way to spend money when traveling, many travelers have opted to instead pay cash because of the dreaded foreign transaction fees charged by many credit card companies. Luckily, many credit card companies are getting the memo and are now offering credit cards that eliminate foreign transaction fees. In fact, American Express, Chase, Citi and PenFed are now either reducing or eliminating foreign transaction fees, which before may have been as much as three percent of the purchase.

Using a credit card to pay for purchases outside of the county is often a smart choice, as it eliminates the need to exchange currency, figure out the currency exchange rate, and the chance of getting duped into spending more money while overseas.

One of the most popular cards that have eliminated the foreign transaction fee is the Capital One Ventures Rewards Card.

Keep in mind that, when converting currency, most credit cards use each morning’s best market price. So, if you start off on a trip and figure out the foreign currency conversion, you may be surprised to find that you may have exceeded your budget because the exchange rate changed during the course of your trip.

Here are other credit cards with no foreign transaction fees:

• American Express Platinum – Before the American Express Platinum card began their no policy of eliminating foreign transaction fees they charged 2.7 percent. Although this card charges an annual fee of $450, they also offer an airline credit fee in the amount of $200. Most heavy spenders agree that the annual fee for this card is well worth the benefits that it provides, especially for travelers.
• Citi Thank You Premier Card – The Citi Thank You Premier is a new card that features an annual fee of $125, although it is waived during the first year. For individuals who spend $1,000 during the first three months, this credit card rewards them with a bonus of 20,000 “Thank You” points.

Credit Card Hotline Goes into Effect

News

Do you have credit card, mortgage or bank problems? Have you experienced problems that cannot (or will not) be handled by your financial institution? Do you feel like your complaints have gone unnoticed or unheard? If so, you now have a watchdog in your corner. The Consumer Financial Protection Bureau just launched a few weeks ago and is a result of last year’s financial reform legislation. In short, it may be just what many consumers have been hoping for.

You can report a problem with any number of financial institutions by contacting the Consumer Financial Protection Bureau at (855) 411-2372 or by visiting them at www.consumerfinance.gov.

Richard Cordray, Ohio’s former attorney general, is set to serve as the director for the Consumer Financial Protection Bureau, although the confirmation is currently awaiting Congressional confirmation. Republicans in the House are still in the process of negotiating the overall structure of the Bureau, which is creating the delay of confirmation. In the meantime, Associate Director Raj Date will take on the duty of overseeing the Bureau’s daily activities.

The Consumer Financial Protection Bureau will be responsible for, among other things:

• Receiving consumer complaints about financial institutions and the financial industry as a whole
• Learning how Americans use financial products
• Restricting deceptive behaviors by the financial industry
• Promoting financial education
• Enforcing consumer financial protection laws

The Bureau is said to serve as an “EPA for money” and will “leverage the latest technology to analyze consumer data and to support Americans in their fight for responsible financial products and services.”

The Bureau may assist credit bureaus when monitoring cash transfers through MoneyGram, Western Union and similar companies; it may educate consumers about credit scores and credit scoring models; and it may encourage credit card companies to exceed the transparency laws recently in place through the CARD Act.

In addition to providing consumers with education and information resources, they will also have a Twitter feed and will be active through several social media sites, thereby making it easier than ever for consumers to report problems or issues with financial institutions.

Airlines Debut New Credit Cards

Choosing Credit Card

The airlines are pulling out all the stops to capture new customers, as is evident with their new credit cards that do everything from offer great airline miles and frequent flyer programs to a boatload of benefits that any credit card customer would be thrilled to have.

In fact, both American Airlines and United Airlines have recently announced new credit cards that feature their frequent flyer programs.

American Airlines Executive AAdvantage World Elite MasterCard

The new American “Executive AAdvantage World Elite MasterCard,” from Citi, for example, includes such perks as free bag check-in for the first bag for the cardholder and for up to eight of his or her traveling companions. It also offers priority check-in service and priority screening service. A special concierge service, along with unlimited access to American’s Admiral Club airport lounges, is also a special bonus for card members.

But what probably makes this Citi card from American Airlines so special is the big mileage bonuses for new enrollments or big spenders. Although the annual fee for this card is $450, frequent travelers will likely recoup this fee in no time.

In addition, for credit card consumers who travel overseas, this card offers no surcharges on foreign charges. And, later in the year, this card, will also offer a chip-and-pin capability, thereby allowing consumers to use the card easier in foreign countries where this technology is now frequently used.

United Airlines Mileage Plus Explorer Card

United Airlines hasn’t missed a step in the world of competitive airline credit cards either, mind you, as is evident with their new “Airlines Mileage Plus Explorer Card.” This card, which is distributed through Chase, is considered to be a bit more mainstream than the Executive AAdvantage World Elite MasterCard from Citi. And their $95 annual fee is proof of this.

Although it boasts a smaller annual fee, it no doubt still serves up great perks, including: a free first –bag check-in for you and a traveling companion; two, one-day passes to United’s Red Carpet Room airport lounge club; priority boarding;  miles that never expire; and plenty of bonuses for heavy users.