Credit Card

Better Business Bureau: Why you should regularly review your credit reports

It is recommended that you review your credit report regularly to stay on top of changes to your credit profile, to confirm the accuracy and completeness of information that is being reported, and to be certain that no one has stolen your identity and opened credit accounts or taken out loans in your name. Many are unaware that there is not just one credit report on you. Most likely, each of the three major consumer credit bureaus (Equifax, Experian and TransUnion) has a report on you. You are entitled to obtain a free copy of your credit report once every 12 months from each of these three bureaus. However, you must request it; this is not a service that is provided to you automatically. The easiest way to accomplish this is to use a “one-stop” outlet established by Congress to make it easier for consumers to get their credit reports from the three bureaus. You may also use this contact point to acquire your credit score, which will entail payment of a modest fee. You may Continue Reading

10 worst credit card mistakes

Whether you're in a financial crunch or just lack a second Ferrari, credit card offers landing in your mailbox might look like an answer to a prayer. Don't succumb to temptation, says Cate Williams, vice president of financial literacy for Money Management International in Chicago. "The first thing consumers need to do is walk from their mailbox to their shredder," says Williams. "A new credit card might give you that sparkling feeling for about 24 hours, but as a way to clean up your finances, borrowing money to pay back other money is not a solution." Experts’ advice can steer you away from the top 10 credit card mistakes. 1. Getting too many Bypass the shredder and you could make one of the most common credit card blunders by collecting too many credit cards. "Ask yourself," says Williams, “ ‘Do I need another credit card?' Probably 95 percent of us don't need another one to keep in the sock drawer or in the little metal box in the kitchen." Howard S. Dvorkin, founder and Continue Reading

How to get out from under credit card debt

You have lots of options, but you have to get started now It’s the single most common question these days in the Answer Desk Inbox: I’m drowning in debt! What can I do? What should you do if the accounts are already delinquent, past due, charged-off, and not necessarily due to neglect? Paying these accounts will still show negligence, so what can we do, those already drowning in bad credit? Here’s our seven-step plan for getting the credit card monkey off your back: Step 1: Reality check Over the years, with the blessing of Congress and federal regulators, the credit card industry has created a repayment system that was skillfully engineered to put its customers deeper and deeper into hock. By keeping credit limits high and monthly payments artificially low, the financial services industry created a dangerous sense of well-being among borrowers. Billions of marketing dollars have been spent to create this false reality. The first step to getting control of credit card debt is Continue Reading

Credit card defaults keep climbing

Default rates in May continue to rise as borrowers struggle with the weak job market. Banks continue to write off credit card debt as consumers hurt by record high unemployment default at an increasing rate. Regulatory forms filed this week by some of the nation's largest banks showed default rates on credit cards rose in May. The default rate is a measure of loans that the bank does not expect to be repaid. "Data from May showed continued signs of stress for card issuers, reflective of worsening unemployment trends and deteriorating macro [economic] conditions," analysts at Bernstein Research said in a report Tuesday. Bank of America (BAC, Fortune 500), the nation's largest bank, said its default rate jumped to 12.5% in May from 10.5% the month before. Other major banks, including Citigroup (C, Fortune 500), JPMorgan Chase (JPM, Fortune 500) and Capital One (COF, Fortune 500), also reported increases in May default rates. However, delinquency rates, which reflect the number of Continue Reading

Weak security at banks, retailers opens door to credit card hacks

Every time you swipe your credit card and wait for the transaction to be approved, sensitive data including your name and account number are ferried from store to bank through computer networks, each step a potential opening for hackers. And although you may take steps to protect yourself against identity theft, an Associated Press investigation has found the banks and other companies that handle your information are not being nearly as cautious as they could. The government leaves it to card companies to design security rules that protect the nation's 50 billion annual transactions. Yet an examination of those industry requirements explains why so many breaches occur. The rules are cursory at best and all but meaningless at worst, according to the AP's analysis of data breaches dating to 2005. It means every time you pay with plastic, companies are gambling with your personal data. If hackers intercept your numbers, you'll spend weeks straightening your mangled credit, though you Continue Reading

Credit card case: Bank to pay up

With advancement of technology and spread of plastic currency, some banks and other organizations are just throwing credit cards to customers. They throw all norms to the winds while issuing the cards and also while sending them to the card-holders. Little do they realize that if the card falls into wrong hands, the unsuspecting card-holder would be put to great loss. Unfortunately, even the record about the delivery of the card to the right person is not maintained by the banks and the present case is an example in this respect,” UT consumer forum said on Saturday as it directed ICICI Bank to pay Rs 25,000 as compensation and Rs 5,000 as litigation cost to consumer Raju Rana. Holding the bank guilty of harassing Rana by not delivering his credit card and for levelling false charges, the forum, headed by Jagroop Singh Mahal, added, “In their zeal to spread the facility, banks even forget the consequent loss being caused by them to innocent customers, many of whom may not even be Continue Reading

New law may help you get out of debt

Congress recently passed the Credit Card Accountability, Responsibility and Disclosure, or Credit CARD, Act of 2009. The law goes into effect Feb. 22, but many pieces of the legislation have other effective dates. For Americans who carry a balance, which is about 40 percent of people who use a credit card, some of the protections will be welcome news. The bill does away with a prevalent credit card practice called the Universal Default Clause. This practice allowed credit card companies to increase interest rates to consumers based on credit report activity on other debt held by the consumer. When this part of the law goes into effect, August 2010, your credit card issuer will be able to raise your interest rate only if the account in question is past due by 60 days or more. Once you get the account back on track and make six timely payments, your interest rate must go back to the lower normal rate for your account. There are some nuances, including rules about promotional rates and Continue Reading

U.S. bill could help merchants cut credit card fees

Merchants and retailers would be able to negotiate with banks to reduce costs associated with credit card purchases, according to legislation introduced on Thursday by lawmakers in the U.S. House of Representatives. The measure, called the Credit Card Fair Fee Act, focuses on the so-called interchange fee that restaurants, service stations and other stores pay banks for credit card-related purchases. Merchants and some lawmakers have complained that merchants and retailers have been blocked from being able to negotiate a fee structure with credit card networks Visa Inc and MasterCard Inc, whose members are banks. Visa and MasterCard set the fee structure and control almost three-fourths of the volume of transactions on general purpose cards. American Express Co and Discover Financial Services have their own systems. Store owners and retailers have also complained that banks collude to set the fee structure and block them from being able to negotiate lower fees, even going as far as Continue Reading

Fewer Credit Card Offers in the Mail, But More Fees

There's mixed news on the credit card front. U.S. households are receiving far fewer credit card offers, which could be a good thing for those who might easily fall into the debt trap. But for those receiving offers, the cards increasingly come with annual fees. In the first quarter, U.S. households received 372.4 million offers, a 67 percent drop from the same time period last year, according to Mail Monitor, the direct mail tracking service from market research firm Synovate. Twenty-seven percent of the cards carried an annual fee, up from 18 percent one year ago. The mean annual fee is $74, Direct Mail found. Credit card companies have been reeling from a record number of write-offs, or debts they have to give up on, making them leery of lending to riskier borrowers. Last month, President Obama signed a law that would ban many consumer-unfriendly industry practices, such as arbitrarily raising interest rates, beginning in February. Card issuers have said the new law could force Continue Reading