Credit Card Quick

Credit Card Delinquencies Continue to Fall as Creditors take Measures to Protect Themselves

News

Credit card delinquencies fell to their lowest level in eight years in the first quarter of 2010, according to the American Bankers Association. In addition, nearly all major credit card companies experienced nearly five months of improvements during that same time period.

These excellent numbers are likely a result of two factors:  consumers are becoming better equipped to handle their debt; and creditors are taking measures to protect their financial interests.

Some of the changes creditors have made as a direct result of the national recession and credit crisis include the following:

• Creditors have lowered credit limits across the board, thereby preventing consumers from overcharging on their credit cards. You may have received a letter from your credit card company regarding this change. You may be able to contact your credit card company and dispute this change, particularly if you have a strong history with them.
• Creditors have begun closing accounts due to inactivity. Many creditors have cut the fat, so to speak, by simply closing accounts that are not being used anymore. If you have a credit card that doesn’t get used anymore, you may have received a letter from your creditor announcing that they will close your account. You may also have received a letter from your creditor stating that “inactivity fees” will soon apply if you don’t use your credit card.

The best rule of thumb is either to cancel the card you no longer use, or to make a purchase on it at least once or twice a year to avoid the dreaded inactivity fee.

• Creditors have written off many of their uncollectible accounts. For many creditors, the process of tracking down severely delinquent customers is simply not worth it, financially speaking.
• Creditors have begun approving credit applications for individuals with the best of credit. Risky credit card applicants need not apply under the eyes of many creditors. The risk of approving an individual with iffy credit simply isn’t worth it anymore to creditors. In other words, don’t expect an approval letter unless your credit score is clean.

How to Obtain a more Competitive Rate with your Current Creditor

Introduction

Everyone is struggling to survive this incredibly difficult economic time, and credit card companies are no exception.

Desperate to recover some of the losses experienced over the last year or two because of the meltdown of the credit sector and the subsequent fall of the housing market, many creditors began to employ less-than-upfront tactics to saddle consumers with more debt. As a result, the government enacted the new credit card legislation, which simply led to more underhanded credit card tactics before the law could be enacted.

You may have very well found yourself in the crosshairs of this credit card mess. If you received a statement or letter from your credit card company with news of an increasing interest rate, decreased credit limit or other changes to your card’s terms and conditions, you may be wondering what your options are, if any.

In particular, many credit card customers with great credit histories and strong credit scores have had their credit limits slashed or their interest rates increased. The question is: is there anything you can do to combat these new credit card tactics?

If you have consistently paid your bills on time and stayed within your credit limit then it is possible to convince your creditor to revert the changes to your account.

How to Achieve Success with your Credit Card Company Following a Hike in Interest Charges and Fees:

1. Contact your credit card company upon receiving news of your credit card’s terms and conditions and let them know that you are a valuable customer and that you want your card’s terms and conditions reverted back to their original status.
2. If the credit card company is not receptive to this request, let them know that you may be forced to cancel the card and instead accept a better offer from another credit card company.
3. If you don’t have any luck with a customer service representative, ask to speak to a supervisor.
4. If you don’t get anywhere with a supervisor, cancel the credit card. The creditor must then allow you to pay off the balance of the card at the original interest rate. However, it is best to secure another card before canceling your current one.

Credit Cards now Encourage Responsible Spending

News

It seems rather ironic, doesn’t it? Credit cards, after years of encouraging credit card spending – often irresponsibly – are now encouraging more responsible behavior and helping consumers better manage their debt.

Case in point: JCPMorgan Chase recently unveiled a new credit card, called Blueprint, which is designed to help customers handle their debt.  This card enables customers to better manage and track their purchases, and helps them pay off their debt by making the process a bit more practical and manageable.

Features of Chase’s Blueprint

One of the key features of the Blueprint credit card includes the ability to avoid interest charges on everyday purchases, such as food and gas. Although consumers would continue to pay interest on other types of charges, everyday purchases would be exempt from interest charges for a certain period of time.

JPMorgan Chase’s Blueprint will also enable customers to design payment plans to assist them when paying down their debt, and will also allow them to better track their spending. Customers of the Blueprint card simply choose their everyday categories in advance to enjoy an interest-free grace period on certain purchases.

The new Blueprint card is available to more than 20 million Chase customers.

Other Credit Card Companies hit the Bandwagon

A number of other credit card companies have also released similar credit cards with features such as debt-management tools and online budgeting tools. Wells Fargo and Discover have both introduced cards like this.

American Express, meanwhile, is pushing its credit card terms to consumers – which includes paying the card in full every month – as the right card for these tough, economic times.

It’s no wonder that credit card companies have finally caught onto the serious credit card problems plaguing millions of consumers in the United States. With credit card defaults and delinquencies soaring, credit card companies must find ways to help consumers better manage their debt.

This new era of “transparent” credit cards is sure to help consumers who are finding it difficult to manage their debt and maintain a strong credit score.

Now, the question is, during this difficult period of time, are consumers willing to trust that credit card companies are there to help them and to not put them further into debt?

Only time will tell.