Credit Card Quick

Your Rights under the CARD Act if you Carry a Balance

Introduction

Many of us carry a balance on our credit cards from month to month; in fact, statistics show that about 46 percent of all American families roll their balances over each month. If you’re one of those individuals, consider yourself lucky to be protected under the CARD act currently in place by Congress.

In fact, some of the provisions of these new credit card laws could very well be speaking directly to you, particularly if you find yourself carrying over your balances from month to month.

Here’s how the new CARD act may affect you and your credit card balances:

• Rate Freeze on New Accounts – The new legislation states that creditors must not change a cardholder’s interest rate during the first year of opening the account. That’s great news for the many cardholders who found credit card companies raising the interest rates on their credit card mere months into their new account. However, there are some exceptions to this rule: expiration of a promotional rate; variable APRs; or payments that fall 60 days past due. The creditors, in these three circumstances, have the legal right to change your credit card’s interest rate.
• Reward for Responsible Behavior – If you find yourself on the receiving end of a rate increase because you fell at least 60 days behind on your credit card payment, you may still be in luck. Although the credit card company has the legal right to raise your interest rate due to nonpayment, they must reinstate your original credit card interest rate if you make all required payments during a six-month period.
• Protection on Existing Balances – Although credit card companies are permitted to increase your card’s interest rate after a year of opening a new account, they are not permitted to apply the new, higher interest rate to your current balance. Only those purchases made after the rate hike can fall under the new interest rate.
• Payments to Higher Interest Rate Balances First – If you have a credit card that has different interest rate for different purchases, the credit card company must apply all of your payment (beyond the minimum payment) to your balance with the highest interest rate first, thereby enabling you to save big on finance charges.

Credit Cards and Traveling: What you need to Know

Introduction

Many Americans turn to their credit cards when traveling, as they can provide a truly convenient and practical means of paying for everything from airline travel and hotels to restaurant meals and entertainment.

Best of all, credit cards, unlike cash, can be easily and quickly replaced if lost or stolen. It is no wonder, then, that so many credit card customers bring their credit cards along for the ride when they take a vacation. Credit cards, in fact, have all but replaced cash and travelers’ checks for traveling; their convenience simply can’t be beat!

Before you embark upon your next holiday, there are a few things you should take care of regarding your credit card:

• Contact your credit card company to check on your credit limit. If necessary, ask for a credit limit increase to handle all of the expenses associated with your travel plans. With the new credit card legislation credit card companies cannot charge you for over-the-limit fees, but they can decline your card if you exceed your credit limit. It is therefore important to make sure you have enough spending room on your credit card to handle all of your travel and vacation expenses.
• Bring along the contact information for your credit card and store it separately from your credit card in case your wallet or purse is lost or stolen. It is important to contact your credit card company immediately upon learning that your card is missing, so keep the phone number handy at all times so you can take care of business and get a new card issued and sent your way sooner than later.
• Consider bringing along a second card in case there are problems with your primary credit card. A second credit card is a bit like an insurance policy. If there are issues with your main credit card, you will still need a way to make purchases and cover expenses while away, so it is always best to have a backup credit card in your wallet, just in case.

How to Protect yourself from the Credit Card Legislation Loopholes

Introduction

It is no secret that credit card companies are looking for ways to make money given the new credit card legislation. As a result, many credit card companies have found quite a few loopholes in the new legislation; loopholes that you may not be aware of and loopholes that can cost you big.

There are, however, a number of things you can do protect yourself, even given the loopholes being enacted by credit card companies:

• Look closely at your credit card statement each and every month and take note of any changes in your credit card’s terms and conditions. The CARD act requires that credit card companies must notify you 45 days in advance of any credit card changes, thereby providing you with the opportunity to find another credit card or close your account. Remember: credit card companies can charge all the fees they want, but in the end it is up to you as to whether you will accept these fees or not.
• Regardless of what you have been told in the past, if you don’t like the terms and conditions of your current credit card, cancel the account and find another one. The small hit you may take on your credit score due to a closed account will be minor, so get rid of the unwanted card and make a better choice. It is important to close any accounts that you no longer use, as you will likely incur inactivity fees as a result inactive accounts.
• To find the most competitive credit card, check out popular bank, credit card, and lending websites. These websites compare all of the latest credit cards, side by side, so can shop for a new credit card in one place. In addition, don’t forget to check out credit cards through your local credit union or bank; often times the interest rates charged by these local institutions are quite attractive and competitive.

It is important to remain in charge of your financial future, and the only way to accomplish this is to remain educated, informed and aware.

Smart Credit Card Spending: your Guide to Responsible Credit Card Use

Introduction

Credit card spending in the United States has changed significantly over the last couple years. In particular, credit card consumers have developed a whole new appreciation for the use of credit cards and how they can both positively and negatively affect their credit.

This new level of thinking when it comes to credit card spending has come at a high cost: credit card companies are now incredibly picky about who they will lend credit to, and unless you have superior credit, you will likely be paying far more in interest than you did just a few years ago.

However, credit cards still remain a highly attractive financial tool for most American consumers; we just all have to make a concerted effort to establish a respect and understanding of them. Here’s how:

• Pay close attention to the credit card’s terms and conditions – Don’t ignore the APR, the credit limit or the grace period on the card, as all of these terms could have an impact on your credit and your credit card balance. You owe it yourself, your finances and your credit to remain an educated credit card consumer because, in the end, only you are responsible for your credit score and your credit card balances.
• Become a smart spender – Credit card debt is a sneaky little bugger, as it can often creep up on us when we are least expecting it. Decide what type of spender you are, and remove your credit cards from your wallet if impulse spending is your problem. Stop and ask yourself if you really need your purchase each and every time you charge on your credit card; this simple step can prevent your credit card balances from ballooning out of control.
• Choose the credit card that fits your lifestyle and your budget – Even with credit card industry lending standards still tight, you can snag a great credit card if your credit score is strong. However, it is important to assess your spending habits, your budget and your needs when deciding which type of credit card is right for you. Not all credit cards are created equal, so take the time to choose the card that will work best for you.

The Four Terms to Pay Close Attention to when Applying for a Credit Card

Introduction

Applying for a credit card involves more than looking for the best interest rate. In fact, it is often the other terms and conditions on the credit card that make the most difference when it comes to managing your credit.

Your credit card can be incredibly valuable, or it can be incredibly detrimental; in other words, your credit card is only as useful as the behavior that accompanies it. And that means starting with a good understanding of your credit card and the important terms to study when applying for a credit card.

1. Annual percentage rate – The annual percentage rate on a credit card, otherwise known at the APR, is usually the best place to start when comparing credit cards. Pay close attention to the APR, as well as the APR should you become delinquent on a payment. New credit card legislation states that a creditor can raise your APR if you are more than 60 days delinquent on a credit card payment, so make it a top priority to get your credit card payment in on time, or else you could be faced with an astronomical APR.
2. Grace period – The grace period on the card is the time frame during which you must pay your credit card’s minimum balance. Although the new credit card legislation has forced creditors to allow customers adequate time to pay their credit card bills, you should still pay very close attention to the due date on the card, as well as a the grace period, and allow yourself plenty of time to get your payment in on time, each and every month.
3. Credit limit – Your credit limit should never, under any circumstances, be disregarded. In addition to incurring hefty over-the-limit fees, your credit score will inevitably become damaged, as your debt-to-income ratio will soar. In other words, make a great effort to keep your balance paid down and to not come close to maxing out your credit card.
4. Introductory rate – Many cards offer introductory rates to court customers. As they say, all good things must come to and end and this goes for introductory rates, as well. Pay close attention to the length of your introductory rate, as well as the APR once the introductory rate has ended.

Learn How to Control Debt and Enjoy Credit Card Spending

Introduction

If you are still struggling to develop good spending habits with your credit cards, but you don’t know how to start or where to turn the consider the following tips for developing a responsible, healthy attitude towards credit cards.

These tips will allow you to maintain control over your debts, will empower you, and will certainly help to build your FICO score so when you are ready to make a purchase you will be accepted and will be given the most competitive interest rate.

Here are some ideas on getting started:

• Make a budget and stick to it – Many times, we end up in credit card debt because our paychecks don’t stretch as far as we want them to. It is because of this that the most important thing you can do to improve your credit card management skills is to write down a comprehensive, realistic budget and stick to it. Write down all expenditures, as well, so you can clearly see where you paycheck goes each month.
• Recognize that your self worth shouldn’t be directly associated with buying new things – Buying new things may make you happy for a moment, but the reality is that shopping is not the key to happiness. Try this: force yourself to go “cold turkey” for one month and only purchase the essentials, such as food and gasoline. After the end of the month, when you still have money in your pocket, recheck your feelings. You may very well begin to rethink your spending habits.
• Resist Temptation – Resist the urge to spend on a whim. Stop impulse spending and this will ensure that you do not possess buyers remorse after purchasing non essentials.
• Consider all of the other things that make you happy and make a point to revisit them – If you’ve enjoyed swimming but haven’t found the time to do it, find a local YMCA and start swimming again. Consider joining a book club or taking a yoga class. Rediscover your passions or find a new one! The bottom line is that all of your happiness should not be tied to shopping.

How to Reward yourself with Responsible Credit Card Spending

Introduction

Do you want to make the change to responsible credit card spending, but you simply can’t find one good reason to stop spending recklessly on your credit card? After all, you are still able to pay the minimum payments on your credit card, so there’s no problem, right?

Well, not so fast. Your manageable credit card habit may be controllable now, but what will your situation look like in the future? Consider whether you would be able to pay your credit card bills if you lost your job tomorrow. Also, consider how long you can continue to pay only the minimum payments on your credit cards before the cards are maxed and the finance charges begin to take over. Finally, consider how many years it will take to pay off just one of your credit cards if you continue to pay only the minimum payment.

Although many of us don’t want to face these realities, the fact of the matter is that we must deal with them head on if we expect to learn from our mistakes and move forward toward a more financially responsible future.

Better yet, start rewarding yourself each time you make a responsible credit card decision. Here are a few tips to get you started towards your financial goals:

• Each time you pay for something in cash instead of credit, calculate the amount of interest you would have paid on that items and take that money and put it into a special savings account. Stay diligent and continue to do this until you have worked up to a specific savings goal. Then, take your saved money and purchase something special for yourself!
• Instead of paying just the minimum payment on your card each month, strive to put at least $20 to $50 more. You will be surprised to see how much quicker your balance shrinks just by putting a little more money towards it each month.
• After you have paid off your credit card, take the money that you used to spend on monthly payments and instead direct it into a savings account and watch your savings grow!

Understanding the Difference between a Credit Card and a Charge Card

Introduction

The terms “credit card” and “charge card” have often been used to describe the same thing but, in reality, they are two very different things.

A credit card is a standard card in which you can charge purchases and then pay them back over a period of time. A charge card, however, is card on which you can make purchases, but they must be paid off when your bill arrives.

Charge cards have been primarily issued by American Express, while other companies, such as MasterCard, Discover and Visa, have offered their customers credit cards.

The Benefits of a Charge Card

The premise behind an American Express card has always been liberal spending limits and no accrued interest rates, mainly because the card balance is paid in full each month. Most American Express credit cards have no set credit limit, but in order to qualify for an American Express credit card your credit history must be near flawless.

Annual Fee Amounts

There are also annual fees charged by American Express for its charge cards; they typically range between $25 to $500 a year, depending on the spending limit and benefits the card provides. The annual membership fee for owning an American Express charge card also comes with its share of perks, including a rewards program.

Should you fail to pay your balance on time, American Express charges either a flat fee or a percentage of the balance, depending on the card you are carrying. Most of the time, however, American Express affords its customers a liberal window in which to pay their balance; typically 40 to 50 days (compare that to 25 to 30 days for a standard credit card).

Flexible Payment Options

American Express also offers flexible payment options for its customers who use their cards to travel. American Express typically allows customers to carry a revolving balance of travel purchases, provided they exceed $200.

Credit Limits

American Express commonly keeps track of its customers buying habits and credit reports, and adjusts their credit limits to reflect this. Although American Express will not put a cap on your credit limit, they can refuse purchases if your balance becomes excessive. American Express, however, does not charge over-the-limit fees to its customers.

The Three Most Common Myths about Credit Cards

Introduction

There are some credit card myths that, regardless of how many times they are debunked, still manage to enter the minds of many credit card customers.

The best line of defense when managing our credit card accounts is to become informed and educated consumers. In other words, don’t let misunderstanding and ignorance ruin your credit and cost you big in terms of higher interest rates and declined loans.

Here are the three most common myths about credit cards:

Myth 1: As long as I pay my card’s minimum balance my credit will be great – Many consumers think that as long as they continue to pay their minimum balance on their credit card that they will enjoy a great credit score. This may have been true just a couple years ago, but many consumers have learned the hard way that it just isn’t a good payment history that determines your FICO score. Another factor that contributes greatly to your FICO score is your debt-to-income ratio.  And if you have many cards that are either maxed or close to being maxed then your debt-to-income ratio becomes skewed, thereby making you a larger credit risk and lowering your FICO score.

Myth 2: The best way to get the lowest interest rate is to transfer my balances every time I get a balance transfer offer – Many of us have played the balance transfer game over the last few years. You know the drill: you accept a balance transfer offer with a low interest rate and transfer all of your higher interest rate balances to that card. Then, once the introductory period has ended and your interest rate has increased, you find another card to do the same thing. Doing this in today’s market may not be such a good idea, though, as your FICO score is directly related to how many credit card accounts you open during a given time and how many credit card accounts you have open during any given time period. In addition, if you close an account every time you open a new one, you don’t have the opportunity to log a payment history, which therefore also negatively affects your credit score.

Myth 3: The new credit card legislation will protect me from all sneaky credit card practices – Sure, the new credit card legislation has eliminated some of the sneaky practices commonly used by credit card companies in the past. However, don’t expect the legislation to protect you from every underhanded practice. The bottom line is that there are still creditors out there who will find a way to make money; and it is up to you remain aware of any changes to your credit card account.

There’s an App for that: Managing your Credit Card from your iPhone

Introduction

Managing our credit card accounts has never been more convenient and practical, and it looks like it just got a little bit easier.

Citibank has teamed up with the iPhone to allow individuals to effortlessly complete their mobile banking services. Called the Citi Mobile Suite, this iPhone application allows cardholders to access and manage their credit card accounts from their mobile phone, from any location and during any time of the day or night. Could it get any easier?

Advantages of Mobile Banking

Mobile banking; in particular, banking from your mobile phone, has never been easier, and the benefits are clear:

• Mobile banking allows credit card customers to keep an eye on their account, at any given time, thereby giving customers more control over their spending habits. Haven’t we all opened our credit card statements and stood there in awe at the balance because we didn’t realize we charged so much the month before? Mobile banking applications for mobile phones eliminates this monthly surprise by allowing customers to check their balance and their recent purchases, whenever and wherever.
• Mobile phone banking allows customers to keep a close eye on their credit limit so they don’t exceed it and incur costly over-the-limit fees. It allows customers to stay within their budget and not overspend without thinking.
• Mobile phone banking, like the one offered through Citi, allows customers to text requests regarding their credit card account, including balances and transaction history. This feature takes the concept of mobile banking one step further, as it allows customers to receive important information about their account on demand.
• Mobile phone banking allows credit card customers to track spending on their credit card as to prevent identity thieves from obtaining their credit card numbers and charging up their credit cards. The ability to view credit card purchases at any given time is a huge blow to identity thefts who before could potentially make unauthorized purchases for weeks before getting caught. The more connected we become to our credit card accounts the less likely that identity thieves will be able to get away with fraudulent spending.