Credit Card Quick

2011: The Return of the Credit Card?

News

Consumers, in general, have gone through a couple of rough years. First, the downfall of the biggest banks, and then the downfall of the housing market and then finally, the tightening of the credit card industry belt.

It’s no wonder, then, that many consumers put their credit cards away. From high unemployment to lenders simply cutting some consumers off, millions of consumers had no choice but to find other ways of paying.

However, some industry analysts see 2011 as a year of change for the credit card industry and consumer spending, in general. In short, it looks as if credit card spending will, once again, see a resurgence, and the debit card industry, which has reigned supreme over the last, couple years, will begin to shrink.

Let’s take a look at a few factors that may change the way we spend in the upcoming year:

• With a stabilizing economy comes consumer confidence. A stabilizing economy, in addition to new jobs, typically spells consumer relief. In other words, if consumers think the economy is getting better, chances are they will begin spending again. And, because there are many indications that employment levels will see a surge in 2011 — Wells Fargo’s Annual Economic Outlook for 2011 shows that employment reports will be positive by the middle of the year and TransUnion reports that that both credit card and mortgage loan delinquencies will experience double-digit free falls — it only makes sense that credit card spending will increase as a result.

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• Competition has begun gaining momentum in the credit card industry, once again. Proof of this is probably sitting in your mailbox right now. If you think you’ve been receiving a lot of credit cards as of late, that is because you probably are. In particular, consumers with good credit are now being bombarded by attractive credit card offers. In fact, according to the marketing research firm, Mintel Compermedia, consumers received about 1.2 billion credit card offers during the third week of 2010, compared with 391 million offers from the same time a year prior.

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• Creditors are upping the stakes when it comes to rewards. In short, expect to see plenty of great rewards programs, provided you have the credit that attracts the attention of the credit card companies. In fact, eight out of every 10 credit cards being offered today comes with some type of rewards program.

How to Regain Control of your Finances

Credit Card Debt

Perhaps the best time to discuss getting a grip on your finances is before the holiday madness begins. And, often, the best way to really examine your spending is by looking at your credit card spending.

Many consumers overspend on credit cards because, well, it’s easy to do. Armed with just a card, you can step into a store and purchase things you normally would not purchase if you had to give up the cash in your pocket to do so. Credit card spending often makes us more careless and irresponsible when it comes to shopping, and therefore puts many of us in a precarious situation of too much debt and not enough income.

You can control your spending, though, even if you are currently spending more than you are making each month. However, in order to regain control, you must be able to identify- and rectify – the source of the problem.

Here’s what you need to do before you make another credit card purchase:

• Contact your creditors and ask for a copy of your credit card statements from the last six months. Once you have the statements in front of you, take the time to really examine them. What are your weaknesses? Do you spend more at a certain retailer? Can you pinpoint what you seem to be spending the most on each month?
• Stop spending until you have recognized the problem. Unless you fully understand why you are spending and what you are spending on, you cannot begin to fix the problem and gain control of your finances. Make a pact with yourself to cease spending on anything but the necessities until you have pinpointed the problem.
• If you feel like you may have a spending problem, get help immediately. Contact a non-profit credit counseling service and seek help for your spending problems. Remember: ignoring the problem won’t make it go away.
• Eliminate the source of the problem. If you overspend each time you shop at a certain retailer, promise yourself that you will not take a credit card with you the next time you visit that particular retailer. Then, reflect on your purchases at that retailer once you no longer use a credit card. Are your purchases different? Are they any less? Are you more inclined to think twice before making a purchase?

Holiday Credit Card Spending, Simplified

Introduction

Don’t let the holidays get the best of you this year. Instead, set up a realistic game plan that will have you relaxing in the near year instead of dreading it.

In particular, credit card spending over the holidays doesn’t have to be stressful. In fact, there are a number of ways you can enjoy the convenience and practicality of credit cards without getting bogged down in holiday debt:

• Make a list (and check it twice!) – If you come armed with a detailed list when you walk into the mall or your favorite department store you will be less likely to make impulse purchases. Before you even begin shopping, promise yourself that you will stick to the list. Once you master the list technique, you will find that your holiday budget will be better kept in check.
• Resist the department store impulse – You will be approached numerous (and I mean numerous) times by well-meaning retail employees who offer to save you loads of money if you open a retail credit card. But beware of these offers! Often times, the interest paid on these types of purchases far exceed any money you would save. Instead, whip out your low-interest credit card and save yourself a lot of time and money.
• Calculate how much money you will have to spend on holiday gifts and plan your spending based on that. If you divide the amount of money you have into the number of people for whom you must purchase presents, you will not have to rely on credit cards to make up the difference. Simply live by the motto: “Don’t spend more than you make” and you can’t go wrong.
• If you make mistakes and end up spending too much, don’t ignore the problem. Instead, take the time once the holidays are over to set up a reasonable repayment plan so that you won’t be haunted by holiday’s past for the better part of 2011.
• It can be said enough: compare prices and shop around! Get an early start so you have the time to comparison shop and you will be pleasantly surprised at all the money you were able to save over the holidays!

American Credit Card Debt Decreases

News

According to Synovate, credit card spending is up again throughout the United States.

In fact, the latest data shows that credit card consumers spent an average of $1,559 in 2010; that’s an increase of 6 percent over 2009. These numbers are indicative of those in 2008 – the last time consumers spent before the recession took hold. In 2008, credit card consumers spent an average of $1,701 on their credit cards.

Credit Card Debt Falling to Lowest Level in Eight Years

A related study by TransUnion also has good news to report: credit card debt has fallen to its lowest level in eight years. The average consumer credit card debt has averaged $4,951 over the last three months, which is a decrease of nearly 13 percent from 2009’s average of $5,719. The last three months, in fact, were the first time the average consumer credit card debt dipped below $5,000 since the first quarter of 2002.

Many economists are quick to point out, however, that the decrease in credit card debt has little to do with consumers having more money; instead, it is likely that consumers are making much more of an effort to get out of the debt they are in because of high interest rates.

Rising Credit Card Interest Rates

According to Synovate, the average interest rate on a credit is now 14.7 percent, compared with 13.1 percent this time last year. The spike in interest rates is likely a result of the CARD Act that was recently enacted.

In short, it seems that credit card companies are getting their money one way or another. If they are limited or prevented from charging certain fees, they will certainly find a new way to bring in the all-might dollar; and that just may be in the form of higher interest rates.

In addition, many banks and credit card companies scrambled to raise interest rates before the CARD Act went into effect, given the strict regulations the government put on companies regarding notice of interest rates increases.

Another reason the data is coming back showing a decrease in credit card debt is also likely because of the many bankruptcies and other debt write-offs that have taken place over the last year. This type of debt reduction or elimination is not included in these studies.

The Top Three Reasons why Credit Card Balances Spin out of Control, And What You can do to Stop it

Credit Repair

You thought you had a good grip on your credit card usage. But then, before you knew it, you were staring at a maxed out credit card and no way of paying it. What happened?

For many of us, spending on our credit cards is not a well thought out decision. We spend – often carelessly – and simply assume that we will pay the bill at some later point in time. However, when that time comes, we often find ourselves short on money and in deep with credit card balances.

Don’t let yourself become yet another credit card statistic. Instead, make it a point to become more aware of your spending so that you don’t find yourself in over your head in credit card debt.

Here are the top three reasons why our credit card balances spin out of control:

1. We don’t pay close attention to our credit card statements – The next time your credit card statement arrives, make it a point to take the time to carefully read the statement. It is much easier to ignore the mounting charges when you simply tear it open and write a check for the minimum payment amount. Simply becoming more aware of your spending can turn your shopping habits around.
2. We fool ourselves into thinking we’ll pay it off soon – Did you ever charge something expensive and fool yourself into thinking that, although you don’t have the money now, you’ll pay it off down the road? For most of us, counting on future income is the wrong move to make. Don’t bet on future earnings to pay off your credit card balances because, chances are, you will be faced with other expenses that must be met and your credit card balances will be left neglected.
3. We carelessly spend – It is common knowledge that people simply spend much more when they have a credit card in their hands. The allure of buying what you want and not dealing with the payment now is very attractive to many people. If you find yourself carelessly spending on your credit card, make a list before you leave the house and stick to it. Also, take a moment before checking out and consider whether you really need to purchase that particular item. Just a few minutes and a little thought can save you from overspending.

Survey Reveals Surprising Statistics about Credit Card Usage and Marriage

News

Are you being completely honest with your spouse regarding your credit card spending habits? If not, you’re not alone!

A surprising, recent survey of 200 Americans by a nonprofit agency, CESI Debt Solutions, revealed that 80 percent of married couples spend secretly on their credit cards. In addition, the survey found that almost 19 percent of married couples have credit cards of which their spouse is not even aware!

Most shocking, however, is that 38 percent of married people are worried that the revelation of their credit card spending would cause their spouse to seek a separation or divorce.

Secret Spending

What are married couples purchasing in secret? Nearly 35 percent of the individuals surveyed say they are buying clothing and accessories; 24 percent spend money on food and dining; nearly 20 percent buy beauty and personal care items on the sly; and almost 17 percent use their secret spending habits to buy gifts.

The survey revealed that nearly 60 percent of married couples keep their spending secret because they wanted to avoid problems in the marriage. Of the married couples spending in secret, 46 percent plan on paying off the debt before their spouse finds out and 11 percent plan on telling their spouse, but they just aren’t ready to do it yet. Finally, 27 percent of the married individuals surveyed say they will never tell their spouse about their spending.

The Consequences of Secret Spending

If you find yourself spending and keeping the purchases from your spouse, you may soon find yourself in a difficult financial situation that could jeopardize not only your credit, but your spouse’s credit, as well.

The best rule of thumb is to approach your spouse and work together to find a solution. If you think you have spending problems, it is also a good idea to contact a non-profit debt counseling service. In the end, credit card balances have a way of sneaking up on us, when we least expect it. Stopping the spending now and remaining open and honest with your spouse will help alleviate much of the financial problems experienced among married couples these days.

Signs that your Credit Card Debt may be out of Control

Credit Card Debt

Has your credit card spending spiraled out of control? Are you struggling to make the minimum payments on your credit cards?

If so, then your credit card debt may be more than you can handle. Here are some signs that your credit card may be out of control:

1. You are near the limit (or maxed) out on your credit cards. If you have charged you credit cards to their limit then you could be putting yourself in danger of not being able to handle your monthly credit card payments.
2. You have a large stack of credit cards in your possession. Too many credit cards with too many balances are a recipe for disaster. Often times, multiple credit cards with multiple balances can create confusion –and in return missed payments. Remember: it is much harder to keep track of your spending if it is spread out over many credit cards.
3. You have a lot of debt, but you prefer to play ignorant. If you refuse to recognize the extent of your credit card debt or if you have no idea how much you have in credit card debt, you could be in for a rude awakening when it comes time to pay your bills each month. Remember: hiding your head in the sand accomplishes little more than the downward spiral of your credit card score.
4. You are skipping one or more credit card bills each month. Picking and choosing which credit card bills get paid each month is a sure sign that your debt has become overwhelming for you.
5. You are only able to pay the minimum payments on your credit cards each month. Paying just the minimum payments can result in big trouble and year’s worth of debt and finance charges. If you are only able to pay just the minimum payment or if you are not even able to manage the minimum payments any longer then you are likely in deep in credit card debt.

The best thing you can do if you find yourself in over your head in credit card debt is to take immediate action. Contact your creditor and arrange a payment plan; contact a non-profit debt counseling company; or seek the advice and guidance of a qualified financial expert.

Tips for First Time Card Holders

Choosing Credit Card

Obtaining your first credit card can be quite exciting, whatever your age. Perhaps you’re young, out on your own for the first time and looking to gain some financial independence. Perhaps you have fought and struggled, against the odds, to build your credit up, after years of denials, and have finally succeeded in securing some plastic. It’s great! Having a credit card  can really be a benefit and a blessing if you use it right. Face it, you probably earned this credit, and you  don’t want to hinder it now!

Here’s a few tips that will help you to avoid credit pitfalls that could lead to financial ruin.

Enticing Offers

They look good; 0% APR offers are intriguing. While these offers might sound enticing, they are merely the bait that reels in the fish. Yes, you can benefit from these offers as a customer, but you will want to read the fine print to find out just how your card works and what kind of hidden fees they are not telling you about on the package. If you don’t read these fine details, you could easily find yourself caught off guard by surprises within your credit card statement a few months down the road.

Budgeting

Sit down and write out, or utilize a spreadsheeet, your income and bills, tracking your expenses and spending. Be sure to calculate in the interest on credit card purchases and know that carrying  a balance will incur more interest over time, causing you to pay more than a purchase might be worth. List your bills in order of priority. While your credit card ill is definitely an important priority and must be paid, your living expenses must come first. if there is little room to wiggle between these expenses, you will need to curb your credit card spending substantially or only use your card for emergencies, if you want to avoid losing the credit you have built up.

Never Look at a Credit Card as “Free Money”

Credit cards are not “free money.” They serve as a temporary replacement for cash, allowing you to pay later and over time, for the purchases you make. If you can not afford it, don’t use it. Many people have gotten in over their heads by seeing credit cards as “free money,” allowing themselves to forget that not only will they be responsible for repayment of the value of the purchases made, but also for fees and interest. Ignoring the debt will not make it go away. it will affect your credit score, and you are liable to wind up with a lot of harassment and financial stress on your hands.

As a first time credit card holder, it is important to take careful steps with your card. Use it wisely to build up your credit and your financial future should be set for bigger and better things.

Save Yourself from Credit Card Debt – Tips to Curb Your Spending

Credit Card Debt

Having a credit card is nice. It is convenient and can even bring you many benefits and perks. However, it is also a tempting little piece of plastic that could have you singing the financial blues if you’re not careful. Before you race of to the store and say “Charge it!” here’s a few things to consider that will help your curb your credit card spending.

Money in the Bank

If you don’t have the money in the bank to write a check or make a cash withdrawal to cover your purchase, can you expect to pay off the balance on your credit card? The answer could be yes or no. It all depends on your particular financial situation. This does not mean you should not make the purchase with your credit card. You simply need to consider if the purchase will be worth the added fess and interest or if it would be better to just pay cash.

Minor Purchases

Try and make the interest rates worth it. Don’t run out and buy something on credit that will only cost you a few dollars. You could wind  up paying double. Save your plastic for the bigger purchases and make the interest worth the money you will have to pay.

Can You Afford It?

This is not so much about your bank balance as it is asking yourself if you can really afford to use that plastic. If you’re struggling to pay your basic living expense, you probably need to put the card aside an not use it until things get better for you financially. Sure, you might have a minimal credit card bill to pay every month, however, you won’t be racking up the charges, fees and interest.

When times are tough, that credit card can seem even more enticing than ever; almost like a lifeline. However, credit cards were never intended to pay your living expenses for you. Using them when you do not have the money to pay can only add to your stress and debt. Remember, a credit card does not entitle you to a freebie. You are still responsible for payment. It’s simply a way to get something now and pay later or over time. Finding yourself unable to pay at the end of the month could lead to not having that card, or any credit card at all, in the future, and could seriously damage your credit score.

The Bottom Line

Only use your credit card for bigger purchases and only when you know  for sure that you have the finances to back it up. If you’re in a bad boat financially, put it away until things are looking up. For those who really only intended to have a credit card for emergencies, remember to keep it that way. A nice new dress does not qualify as an emergency. Hide the card so you are not apt to use until you need it.

By putting these simple tips into practice, you will find yourself thinking more consciously about your budget and spending habits, curbing your debt and easing your financial burdens.

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.