Credit Card Quick

Credit Management among Consumers to Improve in 2010

News

The latest numbers are in and it looks promising.

In fact, it looks as if credit management among consumers will continue to improve for 2010. Although unemployment continues to remain an obstacle for many consumers, credit card delinquencies will continue to decline in 2010, according to TransUnion.

Although many analysts predict that the rate of credit card delinquencies will slow down during the upcoming year, they will nevertheless decline, which is a good sign for creditors everywhere.

TransUnion expects 90-day credit card delinquencies to drop off nearly 1.04 percent by the end of 2010. Most of these credit card delinquencies will be seen through MasterCard and Visa. In contrast, the third quarter of 2009 saw a decrease of 1.1 percent in 90-day credit card delinquencies.

Delinquencies peaked to their highest rate in the third quarter of 2006, to 1.42 percent. TransUnion used statistics from nearly 27 million individual consumer credit reports. Also included in the study were mortgage rate delinquencies: since 2006, mortgage delinquency rates climbed to an average of 50 percent a year, to nearly 1.96 percent in the last quarter of 2006.

It is important to realize, however, that credit card delinquencies won’t really begin to see solid improvements until jobless rates begin to decline.

The Importance of Timely Payments

The decline in credit card delinquencies comes at a time when good credit is king. Paying your credit card bill on time, each and every month, can mean the difference between being able to secure other types of credit or being stuck without any chance of financing.

In order to be certain that your credit card company receives your timely credit card payment, considering signing up for an online bill payment system, either through your bank or credit card company website. It may also help to set up automatic monthly payments, if necessary, to eliminate the chance of missing a monthly payment.

The certainty of being able to secure credit is only accomplished by maintaining an excellent credit score; and to do that, you need to always pay your credit card bills – as well as any other monthly obligation or bill – on time, every month.

What to do when you can’t Afford to Pay your Credit Card Bill

Credit Repair

If you find yourself in the difficult situation of not being able to pay even the minimum payment on your credit card, there are a number of things you can do – and ignoring the problem is not one of them.

Many of us, in the midst of financial despair, may choose to ignore the creditor phone calls and letters; but this simply doesn’t solve anything. Instead, face the problem head-on and figure out what you can do today to get out credit card debt tomorrow.

• Sit down and make a budget. Not just a general budget, but a detailed budget that accounts for every penny going in and out of your household each month. Examine your monthly expenses and look for ways to cut back.

You may want to consider abandoning your land line if you have a great cell phone plan; you may want to drop your expanded cable television package for its basic counterpart; or you may want to make an effort to cut down on your grocery bill every month by clipping coupons and shopping sales. The bottom line is that most everyone can find an extra $50, $100 or more in their budget if they just take the time to re-examine their spending.

• If you’ve lost your job, make immediate, drastic cuts in your lifestyle. Don’t wait until you are behind on all your payments to start making changes. Immediately cut out all unnecessary expenditures and live lean until you can find another job and regain your financial footing.
• If you’re simply in over your head in credit card debt, and can’t seem to find a solution, you may want to consider contacting a non-profit, credit counseling service. These agencies can help you find ways to meet your financial obligations without getting bogged down by late payments and over-the-limit fees.
• If you find yourself struggling to make your minimum payment, you may be able to negotiate a lower, monthly payment with your creditor. Always remember that it never hurts to ask. Many creditors, aware of the financial problems of so many Americans, understand that it is in their best interest to help consumers find a solution to their credit card debt.

How to Effectively Resolve a Conflict with your Creditor

Introduction

The relationship between consumers and creditors has been strained this past year. Between the poor economy, the new credit card legislation and what seems like forever-changing rules to the credit card game, tensions have run high and many credit card consumers are more than a bit confused about their credit card bill and the new changes that seem to be popping up out of nowhere.

If you have a concern with your credit card company, it is best to avoid contacting them in hopes of a screaming match. Yelling and complaining will get you nowhere fast, so it is important to prepare yourself and ask the right questions to your credit card dilemma.

The following steps will help you resolve a conflict with your creditor:

• Your first point of contact will no doubt be a customer service representative. Explain your issue and speak slowly, clearly and remain courteous. Keep all of the necessary information close at hand so that you can refer to a particular bill or transaction.
• Keep a pen and a piece of paper nearby, as well, so you can jot down appropriate notes. Remember to write down the time and date of your call; remember to also ask for the name of the representative.
• If you feel as if the customer service representative cannot handle your problem or if you feel as if you are simply getting nowhere with a resolution then you have the right to ask to speak to a supervisor. However, remain courteous during the entire phone call.
• If you get nowhere by calling the credit card company, make your case in writing. Include all of the information from your phone call(s) and send the letter certified mail so that you have proof that the credit card company received your letter. If you don’t receive a response from the creditor within a few weeks, you can follow up with a phone call or be prepared to take other actions.
• File a complaint with the Better Business Bureau, the National Credit Union Administration, the Federal Reserve or the Federal Deposit Insurance Corporation.
• Make sure you follow the above chain of command when attempting to resolve a conflict, as you may need this information if you need to take the issue further.

Tips for Smart Holiday Shopping

Introduction

Smart holiday shopping starts with a budget and a game plan. Without these two things, your holiday shopping expenses can quickly spiral out of control. Most of us have been in the situation where we charge our holiday purchases to our little hearts’ content, only to be sacked with huge credit card bills come January.

There are a few, simple ways, however, to make this holiday season memorable – without breaking the bank:

• Make your list and check it twice – There is nothing more detrimental to your holiday budget than wandering the stores without a general idea of what you are looking for. It is therefore of the utmost importance to do your homework, nose around and ask plenty of questions so that you can make a list of the holiday items your loved ones are hinting around for. You may also want to cruise the Internet to get a better idea of where to find certain items, to compare brands and to check prices between competitors.
• Create a reasonable budget and stick to it – Heading out the door to start your Christmas shopping without a budget in mind can spell disaster. So, along with your list, decide how much you can afford to spend on each individual. Although it may be difficult to stick to a budget, your wallet will thank you come January, when you will be one of the fortunate few not to have overwhelming credit card debt.
• Get creative and save – Remember that not everything needs to be expensive. It may sound contrite, but many individuals appreciate gifts from the heart as much as they do expensive ones. Use your talent for knitting to create a beautiful blanket for your new niece; purchase a gift card – and free babysitting services – to your brother and his wife; and frame personal photographs in unique and interesting ways for your parents.
• Check your credit card limit, interest rate and related fees before heading out the door. The last thing you need while shopping is trouble with your credit card.

How to Avoid Emotional Spending

Credit Card Debt

I will fully admit that I was a full-fledged, emotional spender. Upset, stressed or excited,  I would always head to the mall for a bit of retail therapy. Unfortunately, most of my emotional purchases came back to bite me.

Those $150 red, high-heeled boots that I thought I absolutely had to have? Yep, they’re sitting at the bottom of my closet. I never did find anything to match them. But, I paid the price for many months as I struggled to pay them off.

I awarded myself with a cruise for my job promotion a few years ago. Unfortunately, the cruise cost more than my job promotion paid and I ended up with a hefty credit card bill that took the better part of two years to pay off.

What both of these purchases had in common were that, given the opportunity to do over, I would have not likely indulged in them. Classic emotional spending mistakes that I wish I could have taken back.

I have since learned the art of controlling my emotional spending by following three, simple rules:

1. I keep all but one of my credit cards at home, locked in my safe. It’s a whole lot harder to make an emotional purchase if I have to travel home first to retrieve the credit card.
2. I avoid my weak spots. I have an affinity for a certain little retail shop in the mall. If I don’t have the money to purchase anything, I simply don’t go there. In fact, I don’t even walk past it. It may sound simple, but many of our little “harmless” trips into our favorite stores end up costing us big.

I wait it out for at least 24 hours. I have learned to “sleep on” any large purchases. In other words, I check out the product, get a price and then head home to think it over for the night. After considering the cost, as well as the length of time it will take to pay it off, I often find myself passing on purchases that, just 24 hours earlier, I thought I absolutely must have.

Is it Time to Break up with your Credit Card?

Choosing Credit Card

The credit card news, as of late, has been anything but positive. The government is tightening the reigns the credit card industry who, in turn, is scrambling to switch up the rules of their credit cards before the new credit card bill takes place. And who is left in the middle of this mess? That’s right: you, the consumer.

All of this mess can make any consumer think twice about even having credit cards anymore. But is the solution to simply cut up your credit cards and live without them?

Although it would make sense that credit cards sometimes hurt credit, most of the time they help credit. In other words, cutting up your credit cards and ending your relationship may not be the best idea, in terms of your credit score.

A Cash-Only Life?

If you plan on living on cash alone for the rest of your life then perhaps ending your relationship with credit cards can work. However, if you plan on financing a vehicle, purchasing a home or refinancing your current mortgage, your credit card relationship is crucial.

This is because credit cards help you establish a strong credit history which, in turn, helps to boost your credit score. Without credit cards, your credit history can be brief, thereby hurting your credit score and your chances of securing any type of financing.

And, given, the state of the current economy and credit sector, a strong credit score is king. Without it, you can all but forget about securing a home loan, vehicle loan or personal loan.

With that said, there are a few things you can do to make your relationship with your credit card company run a bit more smoothly, even in these uncertain economical times:

• If you received notice from your credit card company that your interest rate has been raised, immediately contact your credit card company and request that they cancel the card. They will undoubtedly ask why, thereby giving you a chance to ask if they can lower your interest rate.
• If your creditor refuses to lower your interest rate, you may want to look for another card with a lower interest rate onto which you can transfer your balance. Beware, though, of the balance transfer fees and promotional interest rates, both of which can end up costing you in the long run.
• If you don’t have the option of transferring your balance, the new credit card law allows you to “opt out” of your higher interest rate credit card. If you cancel the card, the creditor must allow you pay off the balance at your current interest rate.

How to Handle a Credit Card Dispute

Introduction

If you had to fight a charge on your credit card, would you know what to do?

It is important that you understand how to handle a credit card dispute so that you won’t be caught in a fight that you can’t handle.

Let’s assume that you made a purchase at a local department store and paid for it with your credit card. When you receive your credit card bill you notice that the department store charged your card twice for the same purchase. Now what do you do?

Under the Fair Credit Billing Act, you can file a dispute with your credit card company to have the charge removed.  It may take a bit of time on your part, but you can get the charge removed if you know which avenues to take.

1. Your first point of contact should be the department store that double charged your purchase. Bring the credit card statement with you and ask them to remove the charge. Chances are they will comply. However, if you have no luck with this approach, consider making a complaint, in writing, and send it as proof to the merchant. Remember to send the complaint via certified mail so that you have proof that it was received.
2. If you still have no luck with the merchant, your next step should be to contact your credit card company and file a dispute. Most credit card companies will want you to submit this dispute in writing. It is important to understand that most credit card companies will only entertain a dispute if it is filed within 60 days of receiving your statement. You may be asked by the credit card company to provide them with proof that you attempted to resolve the dispute with the merchant, which is why sending a dispute letter to the merchant, via certified mail, is so important.
3. The credit card company, once they receive your dispute, will contact the merchant directly to get specifics regarding the charge. If the credit card company finds that the merchant made an error, the charge will be removed. If the credit card company determines that the charge was not made in error then you will be responsible for the charge.
4. The Fair Credit Billing Act specifies that a dispute can only be made with your credit card company if the charge was over $50, and that the merchant must be located in your state or within 100 miles of your billing address.

Examining the Newest Credit Card Legislation Set to go into Effect

News

Starting next week, credit card companies will be forced to make some changes that will affect all of us who carry credit cards.

New Interest Rate/Grace Period Legislation

One of the most prominent features of this area of the new credit card legislation is that creditors must provide their customers with at least 45 days’ notice before they can raise their interest rates or make other changes to their card’s terms and agreements.

This 45-day notice will enable cardholders to decline this rate increase. Although the card account will be closed, the cardholder will have the option of paying off the balance of their credit card at the original rate.

Another feature of the new credit card legislation due to go into effect next week is that creditors must provide cardholders with at least 21 days to pay their credit card bill. As many of us will attest to, many creditors have shortened this window substantially over the last, few years in an attempt to collect their money.

The new credit card legislation, which was enacted in May by President Obama, will not officially go into effect until February 2010, with the exception of the above mentioned laws.

The Effects of the Credit Card Legislation

As a credit card holder, you have likely seen creditors raising interest rates and hiking minimum payments in anticipation of this new law. Another result of this law, says many financial analysts, is that creditors are pulling back consumers’ credit limits and canceling credit cards on unsuspecting consumers.

At this point, it appears to be a bit of a tug-of-war going on between the government and creditors. Many creditors, who anticipate catastrophic losses as a result of the credit card legislation, are fighting back by raising rates and payments before the law goes into effect.

Many financial analysts agree that the new credit card legislation essentially gives creditors an eight-month loophole during which time they can make the necessary changes to counter the changes mandated by the government.

It is more important than ever to remain educated about your credit card accounts, and to carefully read all material that you receive. And, as always, if you don’t agree with your creditor’s new terms and conditions, you have the right to cancel the card.

How to Effectively Use your Credit Card (and not Let it Use You!)

Introduction

There are many consumers who have gotten themselves into a precarious position: they are slaves to their credit card. Sad, but true.

They failed to pay their bill on time, the credit card company raised their interest rates and slapped them with fees and charges, and now they are simply stuck paying a high balance on a credit card with a high interest rate. Plus, now that their credit is in the gutter, they have little chance of transferring the balance to another credit card with a more reasonable interest rate.

Unfortunately, this is not an uncommon occurrence. In fact, many consumers are stuck in this situation because of past mistakes or bad circumstances. With this in mind, it is important to understand that there are things you can do today to prevent this kind of nightmarish situation:

• Read and re-read your credit card’s terms and conditions.

Those loose little papers that come with your bill often provide important information that most consumers simply choose to discard instead of read. Your credit card’s terms and conditions – or, more importantly, changes to these terms and conditions – can have a big impact on the way you use your credit card or pay your credit card bill.

• Always, always, always pay your bill on time.

There is simply nothing more that needs to be said about this rule. All credit card holders should abide by this rule and use it as a mantra, whenever possible!

• Pay more than the minimum. Or better yet, pay it off each month, if possible.

Don’t squeak by each month by simply paying the minimum balance on your credit card. Make yourself a budget and find extra money to put towards your credit card bill. Even as little as $10 or $20 a month can make a huge difference in your balance over the long run!

• Call your credit card company and negotiate a better deal.

If you have been a loyal customer and have always maintained a good standing with the credit card company then you may be in the position to negotiate a better interest rate. If not, then it may be time to look for a better credit card.

The ABCs of Credit Card Ownership

Introduction

With credit card ownership comes a certain degree of responsibility. After all, your credit is on the line.

Making the decision to own a credit card and pay the monthly bill on time, without fail, is a decision which should not be taken lightly. A credit card can be a tremendous convenience, and it can certainly be a practical way to pay monthly expenses without dealing with cash and checks. However, it can also become overwhelming if you don’t approach credit card ownership with financial common sense.

With that said, there are the ABCs of credit card ownership that you should keep in mind should you decide to own a credit card:

• Always pay your bill – no exceptions! Treat your credit card bill just like you would you mortgage or car payment, as neglecting to do this could seriously impact your credit rating. One of the simplest ways to make sure your credit card bill is paid on time is to immediately pay it when you receive the bill. If you make a point to do this every month, then you won’t ever be caught in a situation where the credit card bill simply slipped your mind.
• Be aware of the credit card’s terms and fees. Many credit card owners fail to investigate all of the fees and terms associated with their credit card, and then are shocked to discover additional expenses each month. Remember: it is your responsibility to read and understand all of the fine print associated with your credit card.
• Consider credit card reward programs when choosing your credit card. Many of today’s credit cards include reward programs that offer great incentives on everything from hotels to airfare. Your job is to sort through the different types of credit cards and find the one that is best suited for you. For example, if you are a business traveler, you may want to consider a credit card that offers rewards in the form of free hotel stays. Of course, you should also take the credit card’s interest rate and associated fees in mind when choosing a reward credit card, but it is certainly worth your time to explore your options when considering which credit card is right for you.