Credit Card Quick

Five Signs your College Student may be Ready for a Credit Card

Introduction

Your baby is headed to college, and you wonder if it may be time to arm him with a credit card. Because banks are now held to higher standards when it comes to approving college-age adults with credit cards under the CARD legislation, chances are that you will need to co-sign for a credit card for your college-age child. So, the question is: Is it time to help your college-age child obtain his or her first credit card?

Well, that depends. Although you want to be able to help your child begin to establish good credit, you are also putting your credit on the line if you co-sign. With that said, you should carefully examine your college student’s habits and financial maturity. Here’s what to look for:

1. He has a steady job – A steady job is a must if your child expects to pay off his or her monthly expenditures on a credit card. Arming your college-age child with a credit card only for you to pay it off each month teaches him or her little to nothing about responsible spending, so wait until your child actually has steady employment to be able to pay off the bill each month.
2. He has an active checking and savings account – A checking and/or savings account is a fantastic first step in the world of financial responsibility, so before any credit cards are applied for, make sure your child has an open and active checking account and learns the basics of checks and balances.
3. He pays his other bills on time – A great indication of your child’s ability to handle the responsibility of a credit card is whether he or she has bills and pays them on time, without fail.
4. He understands the value of money – Does your child save any money each month? Does your child save up for things he or she wants? Does your child have a clear understanding of living within his or her means?
5. He understands the importance of a strong credit score – Before co-signing for your college student’s first credit card, have a long talk about the importance of a strong credit score, the advantages to having a strong credit score, and the many downsides to a weak credit score.

Bank of America to Hit Customers with Annual Fees

News

It is clear that credit card companies are still reeling from the ill effects of the CARD Act legislation. From raising interest rates to becoming much more selective regarding whom they will offer credit, the effects of the CARD Act continue to reverberate throughout the credit card industry.

Bank of America, though, appears to be taking things one step further, as they recently announced that they will begin charging annual fees to millions of its customers. Although it is still not clear how many people will be affected by these new annual fees, even consumers with a good history and a good credit score may not be in the clear regarding annual fees.

Fees to Start Soon

Bank of America is expected to begin sending letters to its current credit card customers as early as this spring. The letter will state that the company will begin charging many of its customers a $59 annual fee. The letter also states three reasons why credit card customers may be charge this annual fee, but it falls short on spelling out who exactly will be targeted.

The letter goes on to state that the company is making the changes due to “derogatory public record or collection filed” and that they will review their banking relationship with each customer.

Who is being Targeted?

It appears that the company is targeting customers with outstanding balances and why they are doing this is quite simple. If the company charges a customer with a large balance the $59 annual fee, they can either accept the fee or close the account. However, before they can close the account they must pay off the balance — and this is simply not possible for some customers. In short, the company can get away with charging the $59 fee to customers with higher balances because, unless they pay off their balance, they must keep the card open and pay off the fee.

Bank of America, although it doesn’t state this, of course, says that every account undergoes a periodical review, and that every customer will either have the choice to accept the fee or close the account. Bank of America also states that the “majority” of customers will receive the annual fee.

How to Always Win at the Credit Card Game

Introduction

The Credit Card Accountability, Responsibility and Disclosure Act (CARD) that was enacted into law in May 2009 has accomplished what so many consumers had been hoping for over the years: to make credit card companies become more transparent and to eliminate certain credit card practices that were less-than-fair.

However, in response to the CARD Act, and perhaps because many credit card companies cried foul because some of the changes in the legislation meant that they were losing money, creditors began finding ways around the legislation. Therefore, many consumers were left even more confused than before the CARD Act was even enacted.

If, after all of the changes enacted by credit card companies, both to adhere to the new CARD Act guidelines and to avoid losing a great deal of money, you are still quite confused, then it is up to you to engage in a number of activities that will, regardless of what legislation is passed, protect you and make you a winner at the credit card game.

• Always pay your bill on time – OK, so this sounds rather obvious, but the fact is that many consumers still fail to do this on a regular basis. The truth is that creditors cannot charge you any kind of fee if you pay your bill on time. They can’t change your credit card interest rate and they can’t charge you any late fee. The best rule of thumb is to set up automatic payments through your bank so that you can be assured your credit card bill is paid on time, each and every month. If you pay your bill in full each month, set a reminder on your desk calendar or smart phone.
• Don’t reach for the convenience checks – Creditors love to send out those tempting little advance checks, also known as convenience checks. But you must be strong and send them to the shredder, as they are riddled with all kinds of fees and higher interest rates, and they are not protected by the CARD legislation. In short, there should never be a time when using convenience checks are OK.
• Read any material that is sent to you – Because creditors must inform consumers of any changes to their credit card account, you may find yourself receiving more correspondence from your creditor. Avoid the urge to toss the letters into the garbage can and instead take the time to read them so you can always be aware of any changes to your account.

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.

Why the New Credit Card Legislation may not be all it’s Cracked up to be

News

February 22^nd is the magic date when all of the credit card legislation that was passed through the Credit Card Accountability Responsibility and Disclosure Act (CARD) must go into effect. That means that all of the credit card companies must comply with the new terms set forth in the CARD Act.

Although these changes are designed to help consumers better manage their debt and to discourage credit card companies from operating under false pretenses, it doesn’t mean that you can forget about fees and hiked interest rates.

The bottom line is that you still must be a responsible consumer; it does not give you a free pass to spend as you like without consequences.

In addition, don’t assume that just because the government has reigned in the credit card companies on certain points doesn’t mean that they can’t then conjure up new traps in which to catch consumers.

The Fine Print

Most of us are conditioned to simply discard the legal mailings we receive from our credit card company about our credit card’s terms and conditions. However, we must begin to change our way of thinking because the credit card legislation doesn’t deny the right of the credit card company to raise interest rates or impose fees; it simply states that they must warn credit card customers ahead of time.

For example, your credit card company can raise your interest rate on future purchases at any time, but they must also give you a 45 day warning. If you fail to read this fine print in your contract, your credit card company could potentially raise your credit card’s interest rate and you will be none the wiser; that is, until your receive your first credit card statement with a large finance charge.

Fixed-Rate vs. Variable Rate

Another trick that credit card companies have up their sleeves is to turn fixed-rate credit card accounts into variable-rate accounts. This is because the credit card legislation only covers fixed-rate credit cards. In other words, the creditor is free to increase your credit card’s interest rate at any given time if it is a variable-rate account.

The bottom line is that we all have to become better advocates for ourselves and to make it a point to understand all of the terms and conditions associated with our credit cards.

How Will the New Credit Card Bill Affect Creditors and Consumers?

News

The new sweeping regulations on credit card practices recently signed into law by President Obama has many credit card customers jumping for joy.

Learning from Past Mistakes

In past years, credit was flowing freely and creditors were more than anxious to lure consumers in with promises of teaser rates, gimmicks and reward programs. Many of us took the bait and began charging to our heart’s content.

Fast forward to 2009 and things don’t look quite so rosy anymore. Many of us now find ourselves in quite a precarious position; the economy is in a recession and our credit card debt is piling high as creditors dramatically raise our interest rates and add over-the-top fees. Not only are many of us unable to pay down our credit cards, but some of us are simply unable to keep up with the payments and fees.

New Changes Underway

The new credit card bill, which is due to go into effect July 1, 2010, is designed to come to the rescue of the millions of Americans bogged down in credit card debt and unable to get out from under it. But will this new law affect the way creditors lend out money?

Perhaps. We may see fewer promotional rates, fewer rewards programs, higher interest rates and tougher credit criteria, particularly for those with a short credit history. But in the end, credit card companies are still a business, and for those of who have worked hard to maintain our credit, credit will still be available. In fact, competition among creditors will still exist, thereby providing consumers with excellent credit plenty of options regarding credit cards.

In addition, the new law requires that credit card companies must provide cardholders with notice of a rate or fee increase at least 45 days ahead of time, thereby enabling consumers to make a change, if desired.

The bottom line is that the new credit card laws will put the responsible credit card consumer back into the driver’s seat, and will prohibit credit card companies from imposing certain practices that will only leave credit card customers in a no-win situation.

Details of the New Credit Card Bill

News

President Obama recently signed the Credit Card Accountability, Responsibility, and Disclosure (CARD) Act, which will protect credit card customers from outrageous fees and skyrocketing interest rates.

The CARD Act is designed to take control of out-of-control credit card practices that have left many credit card customers in over their head and unable to find their way out.

The CARD Act, which takes effect on July 1, 2010, will regulate the practices of many credit card companies of raising interest rates and imposing fees that have left many cardholders simply unable to reasonably repay their debts.

Highlights of the New Credit Card Bill

Within the guidelines of the new credit card bill, a creditor may only raise a cardholder’s interest rate after he or she has been more than 60 days delinquent. The creditor must then reinstate the cardholder’s original interest rate after he or she has made payments on time for six months.

Another positive feature of the CARD Act is that creditors may not raise a cardholder’s interest rate during the first year on a new or existing account unless the interest rate is variable, or if the cardholder fails to make a payment within 60 days of the due date.

Other features of the bill include: limiting over-the-limit fees; providing cardholders with a reasonable amount of time to make a payment; putting any monies which exceed the minimum payment toward the higher interest debt on the same credit card; eliminating two-cycle billing; and providing cardholders with a 45-day notice of a interest rate increase.

The CARD Act is a positive law for trustworthy, responsible credit card holders who consistently pay their bills on time.

Most of us have been in a situation where we missed the due date for a credit card or fell on bad luck and were not able to make a payment by the due date. With old credit card practices, most creditors would automatically raise our interest rates dramatically, thereby causing many of us to simply be unable to pay down our credit card debt.

The CARD Act will protect responsible credit card holders and enable consumers to be better equipped to handle their credit card debt and pay it off in a reasonable amount of time.