QUESTION: Do the City of Cookeville and Putnam County offer government credit cards to use on job expenses? Are there limits on how much the employees can spend and what items they can use the cards to pay for? Do all employees have them or just certain departments -- which departments?
ANSWER: Mike Davidson, finance director for the City of Cookeville, said the city provides a credit card to each departmental director and police detective to use for business and travel related expenses. Directors are authorized to purchase items that do not exceed $500 in value without approval from the city manager. Also, the police department maintains a training credit card that is not assigned to an individual officer, but used by any officer for travel related training expenses. Kim Blaylock, Putnam County executive, said Putnam County does not have credit cards. Some of the departments have "store" cards. Only employees authorized to make purchases have assess to these cards.
Tuesday, September 29, 2009
New law requires credit card applicants to be 21
Students applying for credit could soon hear a familiar motto: 21 means 21.
Beginning in February 2010, a federal law will prohibit those under 21 from acquiring a credit card without a co-signer or proof of sufficient income.
The changes stem from the 2009 Credit CARD Act, a measure that will tie lenders to responsible practices and full disclosure.
It could ultimately end up tying the hands of financially strapped students.
According to The Wall Street Journal, credit card issuers have already begun to increase interest rates and annual fees in anticipation of the changes.
In addition, credit will become more expensive as laws force lenders to be more selective in choosing clientele.
"You know, it's hard right now," said Tarin Acaron, a marketing officer for Campus USA Credit Union in Gainesville.
"A lot of people are using their credit cards to get by and pay their bills because they just lost a job," Acaron said.
In the tumultuous economic environment, Campus USA offers a student-friendly alternative that considers a range of factors apart from credit scores and employment income.
"I don't know if people understand how important [credit] is," she said.
"It takes just a little bit to hurt it and so much to fix it."
According to the Counsel of Economic Education, mounting credit card debt trumps all other reasons for why students drop out of college.
Some students rely on credit cards to purchase expensive necessities.
UF falls in this swipe-happy camp.
Lynne Vaughan, director of bookstores at UF, said students without financial aid primarily use credit to purchase textbooks.
While some see burden on the horizon, others expect gain.
Companies like nFinanSe, a publicly traded financial services provider based in Tampa, specialize in reloadable prepaid cards.
The company looks to fill the credit card void with a product that doesn't include overdraft fees or charge interest.
The card is free to college students who apply online.
"In this day and age, there is a plastic gap," said Clare Morgan, the vice president of marketing for nFinanSe. "You need plastic to shop online, rent movies, place an order."
"Who wants to walk around with a wad of cash?"
Unlike credit or debit, an nFinanSe prepaid card isn't connected to a bank account and charges a monthly usage fee of $2.95.
It teams with the Discover Card network, which means users can add funds at more than 72,000 locations nationwide.
Morgan said her company's younger target market is more savvy with money now.
She said she isn't sure whether Americans as a whole will continue to over-consume.
"I don't have a crystal ball," she said. "I wish I did. I would like to think we have all learned our lesson."
The law will force credit providers to issue 45-day advanced notices of rate changes, limit interest hikes on existing balances and prevent solicitation to those under 21.
Congress suggests that universities require marketers to alert the school when conducting on-campus registration.
The law will also require companies offering free credit reports to say in ads that consumers can get to one report from each federal credit bureau per year.
Beginning in February 2010, a federal law will prohibit those under 21 from acquiring a credit card without a co-signer or proof of sufficient income.
The changes stem from the 2009 Credit CARD Act, a measure that will tie lenders to responsible practices and full disclosure.
It could ultimately end up tying the hands of financially strapped students.
According to The Wall Street Journal, credit card issuers have already begun to increase interest rates and annual fees in anticipation of the changes.
In addition, credit will become more expensive as laws force lenders to be more selective in choosing clientele.
"You know, it's hard right now," said Tarin Acaron, a marketing officer for Campus USA Credit Union in Gainesville.
"A lot of people are using their credit cards to get by and pay their bills because they just lost a job," Acaron said.
In the tumultuous economic environment, Campus USA offers a student-friendly alternative that considers a range of factors apart from credit scores and employment income.
"I don't know if people understand how important [credit] is," she said.
"It takes just a little bit to hurt it and so much to fix it."
According to the Counsel of Economic Education, mounting credit card debt trumps all other reasons for why students drop out of college.
Some students rely on credit cards to purchase expensive necessities.
UF falls in this swipe-happy camp.
Lynne Vaughan, director of bookstores at UF, said students without financial aid primarily use credit to purchase textbooks.
While some see burden on the horizon, others expect gain.
Companies like nFinanSe, a publicly traded financial services provider based in Tampa, specialize in reloadable prepaid cards.
The company looks to fill the credit card void with a product that doesn't include overdraft fees or charge interest.
The card is free to college students who apply online.
"In this day and age, there is a plastic gap," said Clare Morgan, the vice president of marketing for nFinanSe. "You need plastic to shop online, rent movies, place an order."
"Who wants to walk around with a wad of cash?"
Unlike credit or debit, an nFinanSe prepaid card isn't connected to a bank account and charges a monthly usage fee of $2.95.
It teams with the Discover Card network, which means users can add funds at more than 72,000 locations nationwide.
Morgan said her company's younger target market is more savvy with money now.
She said she isn't sure whether Americans as a whole will continue to over-consume.
"I don't have a crystal ball," she said. "I wish I did. I would like to think we have all learned our lesson."
The law will force credit providers to issue 45-day advanced notices of rate changes, limit interest hikes on existing balances and prevent solicitation to those under 21.
Congress suggests that universities require marketers to alert the school when conducting on-campus registration.
The law will also require companies offering free credit reports to say in ads that consumers can get to one report from each federal credit bureau per year.
cutting board accident, credit card stolen, assault
NU student slices thumb in cutting board accident
University Police and the Evanston Fire Department assisted a female Northwestern student Sunday evening at the Theatre and Interpretation Center, 1949 Campus Drive, police said.
The student had sliced her thumb while using a stationary cutting board, lost consciousness and hit her head, said University Police Deputy Chief Dan McAleer.
Police observed a cut on the student's thumb, as well as a quarter-sized lump on her forehead.
Credit card stolen from student through mail
An NU student reported a missing credit card Sunday afternoon, police said.
Last week, the student's mother mailed his debit card along with the PIN number to the student's on-campus residence, McAleer said. However, the student, who lives in the Sigma Chi fraternity house, 2249 Sheridan Rd., never received the card in the mail. He later received a debit card statement which included two unauthorized charges completed in Evanston totaling more than $500, McAleer said.
The incident remains under investigation.
Five men assault man, steal wallet on Lake St.
A man reported a robbery Saturday at the intersection of Lake Street and Pitner Avenue, police said.
The victim was approached by five unknown suspects who, with no provocation, knocked the victim to the ground and kicked him repeatedly in the torso, said Evanston Police Department Cmdr. Tom Guenther.
The suspects, who are believed to be teenagers, stole the victim's wallet, which contained a small amount of cash, Guenther said.
The incident remains under investigation.
University Police and the Evanston Fire Department assisted a female Northwestern student Sunday evening at the Theatre and Interpretation Center, 1949 Campus Drive, police said.
The student had sliced her thumb while using a stationary cutting board, lost consciousness and hit her head, said University Police Deputy Chief Dan McAleer.
Police observed a cut on the student's thumb, as well as a quarter-sized lump on her forehead.
Credit card stolen from student through mail
An NU student reported a missing credit card Sunday afternoon, police said.
Last week, the student's mother mailed his debit card along with the PIN number to the student's on-campus residence, McAleer said. However, the student, who lives in the Sigma Chi fraternity house, 2249 Sheridan Rd., never received the card in the mail. He later received a debit card statement which included two unauthorized charges completed in Evanston totaling more than $500, McAleer said.
The incident remains under investigation.
Five men assault man, steal wallet on Lake St.
A man reported a robbery Saturday at the intersection of Lake Street and Pitner Avenue, police said.
The victim was approached by five unknown suspects who, with no provocation, knocked the victim to the ground and kicked him repeatedly in the torso, said Evanston Police Department Cmdr. Tom Guenther.
The suspects, who are believed to be teenagers, stole the victim's wallet, which contained a small amount of cash, Guenther said.
The incident remains under investigation.
Essential Credit Card Debt Facts
The obsession with credit cards has put the US citizen in over $1 trillion of credit card debt in a spending frenzy that has brought many to the brink of financial despair. This is not just an American problem though as this obsession has become worldwide and we will highlight the main credit card debt facts and what the next course of action should be.
Love them or loathe them, the credit card is actually a good thing. We are all searching for a better credit score and a credit card is very often the best way to build good credit, but misuse it and they suddenly become your most hated financial outlay.
The credit card debt facts are these:
The pros are;
1# Emergency Financial Aid: A credit card can be used, as is the case by many users, as an emergency source of funds.
2# Free Insurance: when used to purchase items many cards offer the security of free purchase insurance.
3# Improved Credit Status: As long as your use is controlled and you don't run into problems your improved credit status will make it easier to gain loans for cars etc.
The negatives are;
1# Card Misuse: Using your credit card as an extension of your paycheck and maxing it out will get you way in over your head very quickly.
2# Missing payments will have an adverse affect on your credit for SEVEN years and becomes affective almost as soon as you miss your first payment.
When deciding to get a credit card the two important factors to give consideration to are the Interest charged by the card supplier and the balance payable at the end of each period.
Different Credit card companies offer different interest rates, but an acceptable Fixed interest rate is between 8 and 11 percent. You can then compare the various special offers that each supplier in that bracket is offering before making your final choice.
With regards to payable balance that comes down to you, how much you can comfortably afford to pay each month, remember this sum should include the added interest rate; for example: If you can only afford to pay $100 each month and your credit card has an interest rate of 10% APR you should only spend around $90 to $95 as there will be a minimum monthly interest charged.
However should these credit card debt facts go unheeded it is likely that you will end up looking to consolidate your credit card debt and quite often a debt consolidation loan is the best option to do this, but before looking into a credit card debt consolidation loan there are methods that many are now using to achieve financial freedom in remarkably short periods of time.
The methods mentioned are not widely known but are both ethical and legal and are not liked by the financial institutions who DO NOT want you or anyone else using them to reduce and eliminate debt as it would be very damaging to their interest related profits.
Love them or loathe them, the credit card is actually a good thing. We are all searching for a better credit score and a credit card is very often the best way to build good credit, but misuse it and they suddenly become your most hated financial outlay.
The credit card debt facts are these:
The pros are;
1# Emergency Financial Aid: A credit card can be used, as is the case by many users, as an emergency source of funds.
2# Free Insurance: when used to purchase items many cards offer the security of free purchase insurance.
3# Improved Credit Status: As long as your use is controlled and you don't run into problems your improved credit status will make it easier to gain loans for cars etc.
The negatives are;
1# Card Misuse: Using your credit card as an extension of your paycheck and maxing it out will get you way in over your head very quickly.
2# Missing payments will have an adverse affect on your credit for SEVEN years and becomes affective almost as soon as you miss your first payment.
When deciding to get a credit card the two important factors to give consideration to are the Interest charged by the card supplier and the balance payable at the end of each period.
Different Credit card companies offer different interest rates, but an acceptable Fixed interest rate is between 8 and 11 percent. You can then compare the various special offers that each supplier in that bracket is offering before making your final choice.
With regards to payable balance that comes down to you, how much you can comfortably afford to pay each month, remember this sum should include the added interest rate; for example: If you can only afford to pay $100 each month and your credit card has an interest rate of 10% APR you should only spend around $90 to $95 as there will be a minimum monthly interest charged.
However should these credit card debt facts go unheeded it is likely that you will end up looking to consolidate your credit card debt and quite often a debt consolidation loan is the best option to do this, but before looking into a credit card debt consolidation loan there are methods that many are now using to achieve financial freedom in remarkably short periods of time.
The methods mentioned are not widely known but are both ethical and legal and are not liked by the financial institutions who DO NOT want you or anyone else using them to reduce and eliminate debt as it would be very damaging to their interest related profits.
Credit card ratings by JD Power & Associates
J.D. Power and Associates recently released the results of a customer satisfaction survey of credit card issuers in conjunction with their 2009 consumer satisfaction awards. According to J.D. Power and Associates: "The study measures customer satisfaction with credit cards by examining six key factors: interaction; fees and rates; billing and payment process; rewards; benefits and services; and problem resolution."
In these categories, they found that Discover Card and American Express Credit Cards topped the list in nearly every category along with National City (except in the category of Problem Resolution where the sample size was too small). American Express ultimately received the J.D. Power and Associates Award for Credit Card Satisfaction. In some categories, these big three were rivaled by Wells Fargo. U.S. Bank also, notably, scored above average in Fees and scored an outstanding in Problem Resolution. Target Visa, WaMu, GE Money, Credit One Bank, and First Premier Bank scored below average (2 out of 5) across nearly all categories. Interestingly enough, Bank of America scored only average in all but two categories (Rewards and Problem Resolution) where it scored below average.
According to J.D. Power and Associates, the survey shows that overall credit card customer satisfaction has fallen to its lowest level since the study began in 2007, and that customer satisfaction with credit cards is the least among all the financial products measured by surveys conducted by the J.D. Power and Associates marketing company.
While we find certain aspects of this survey enlightening, we would like to point out that in some respects the survey is comparing apples to oranges. First Premier Bank issues, for instance, cards to people with poor credit scores, whereas, American Express only issues cards to people who have excellent credit. The question of Fees, Rewards, and Product Benefits between the two companies is somewhat self evident. American Express is going to offer lower fees, more generous rewards, and better product benefits than First Premier Bank. How First Premier Bank does against other credit card companies catering to a similar clientele is the right question and a question that unfortunately this survey cannot address. So, in categories like Fees, Rewards, and Product Benefits, we expect that the credit cards designed for people with poor credit simply aren't going to do very well, nor do we think they should. At the same time, giving American Express the J.D. Power and Associate 2009 award for Credit Card Satisfaction, while admirable in acknowledging their outstanding customer service, doesn't do much for people whose credit scores preclude them from getting an American Express card and the survey doesn't tell them which of the companies that caters to this segment will offer them the best deal for their money.
In these categories, they found that Discover Card and American Express Credit Cards topped the list in nearly every category along with National City (except in the category of Problem Resolution where the sample size was too small). American Express ultimately received the J.D. Power and Associates Award for Credit Card Satisfaction. In some categories, these big three were rivaled by Wells Fargo. U.S. Bank also, notably, scored above average in Fees and scored an outstanding in Problem Resolution. Target Visa, WaMu, GE Money, Credit One Bank, and First Premier Bank scored below average (2 out of 5) across nearly all categories. Interestingly enough, Bank of America scored only average in all but two categories (Rewards and Problem Resolution) where it scored below average.
According to J.D. Power and Associates, the survey shows that overall credit card customer satisfaction has fallen to its lowest level since the study began in 2007, and that customer satisfaction with credit cards is the least among all the financial products measured by surveys conducted by the J.D. Power and Associates marketing company.
While we find certain aspects of this survey enlightening, we would like to point out that in some respects the survey is comparing apples to oranges. First Premier Bank issues, for instance, cards to people with poor credit scores, whereas, American Express only issues cards to people who have excellent credit. The question of Fees, Rewards, and Product Benefits between the two companies is somewhat self evident. American Express is going to offer lower fees, more generous rewards, and better product benefits than First Premier Bank. How First Premier Bank does against other credit card companies catering to a similar clientele is the right question and a question that unfortunately this survey cannot address. So, in categories like Fees, Rewards, and Product Benefits, we expect that the credit cards designed for people with poor credit simply aren't going to do very well, nor do we think they should. At the same time, giving American Express the J.D. Power and Associate 2009 award for Credit Card Satisfaction, while admirable in acknowledging their outstanding customer service, doesn't do much for people whose credit scores preclude them from getting an American Express card and the survey doesn't tell them which of the companies that caters to this segment will offer them the best deal for their money.
Monday, September 28, 2009
Congress may fast-track new credit card relief
Lawmakers are taking another swipe at the credit card industry.
Representative Carolyn Maloney is looking to speed up enforcement of a new law that would limit a credit card company's ability to change interest rates.
It was supposed to take effect in February, but some lawmakers want to move the date to December because many companies are raising their rates and fees now, ahead of the deadline.
"The abuses by some in the industry which led Congress to pass my original legislation have only increased since the bill's signing," Rep. Maloney said.
As the battle between Congress and the credit card companies intensifies, there is also a noticeable shift in the industry.
The Blueprint card from Chase allows consumers to determine the types of everyday purchases, like groceries, gas, or entertainment, that they want to pay off every month interest free, even while accumulating interest on other "big-ticket items".
Others in the industry have announced similar programs aimed at helping customers manage their spending.
Still, some credit card companies have pushed back on the deadline shift.
They're worried they can't have the infrastructure or system in place to handle all of the new requirements if lawmakers move the deadline up to December or even January.
Representative Carolyn Maloney is looking to speed up enforcement of a new law that would limit a credit card company's ability to change interest rates.
It was supposed to take effect in February, but some lawmakers want to move the date to December because many companies are raising their rates and fees now, ahead of the deadline.
"The abuses by some in the industry which led Congress to pass my original legislation have only increased since the bill's signing," Rep. Maloney said.
As the battle between Congress and the credit card companies intensifies, there is also a noticeable shift in the industry.
The Blueprint card from Chase allows consumers to determine the types of everyday purchases, like groceries, gas, or entertainment, that they want to pay off every month interest free, even while accumulating interest on other "big-ticket items".
Others in the industry have announced similar programs aimed at helping customers manage their spending.
Still, some credit card companies have pushed back on the deadline shift.
They're worried they can't have the infrastructure or system in place to handle all of the new requirements if lawmakers move the deadline up to December or even January.
Man admits illegal use of charge card
A Detroit man pleaded guilty Friday to using a fraudulent credit card at the Genoa Township Meijer to make purchases.
Emmanuel Thomas Dawson pleaded guilty as charged to illegal use of a financial transaction device in exchange for prosecutors dismissing a charge of conspiracy to commit the same crime.
Dawson, 29, admitted that he and co-defendant John Thomas Cotton used the fraudulent credit card at the store in August.
Dawson, who will be sentenced as a habitual offender, faces up to eight years in prison. Sentencing is set for Oct. 29 before Judge Michael P. Hatty.
Dawson's criminal history includes a conviction for armed robbery and felony firearms.
Dawson also faces new charges in Livingston County for delivery or manufacture of a controlled substance. Details on the Drug Enforcement Administration's investigation was not immediately available Friday.
Cotton, 20, was sentenced last week to 15 days in the county jail and given credit for 15 days already served. He was given two years of probation under the state's Holmes Youthful Trainee Act, which means he will have no public criminal record if he is successful on probation.
Both Dawson and Cotton were ordered to pay $7,684 in restitution.
Emmanuel Thomas Dawson pleaded guilty as charged to illegal use of a financial transaction device in exchange for prosecutors dismissing a charge of conspiracy to commit the same crime.
Dawson, 29, admitted that he and co-defendant John Thomas Cotton used the fraudulent credit card at the store in August.
Dawson, who will be sentenced as a habitual offender, faces up to eight years in prison. Sentencing is set for Oct. 29 before Judge Michael P. Hatty.
Dawson's criminal history includes a conviction for armed robbery and felony firearms.
Dawson also faces new charges in Livingston County for delivery or manufacture of a controlled substance. Details on the Drug Enforcement Administration's investigation was not immediately available Friday.
Cotton, 20, was sentenced last week to 15 days in the county jail and given credit for 15 days already served. He was given two years of probation under the state's Holmes Youthful Trainee Act, which means he will have no public criminal record if he is successful on probation.
Both Dawson and Cotton were ordered to pay $7,684 in restitution.
New rules due on credit cards for those under 21
Starting Feb. 22, college students won't be tempted with free stuff to sign up for credit cards. That's when new marketing restrictions and other rules will take effect, and the end result should be fewer plastic-driven shopping sprees for consumers below the age of 21.
The average college senior had credit card debt of $4,100 in 2008, up from $2,900 in 2004, according to a Sallie Mae survey. Credit card companies expect young consumers to stay loyal to the first credit card brands that make it into their wallets. The card issuers sometimes get data on students directly from colleges, for a fee.
Students can end up with cards with very high interest rates or big fees that can make it easy to accumulate a lot of debt. The average college student is already awash in credit. Most have four or more cards, and only 17 percent said they always pay off their balances every month, according to Sallie Mae.
Of course, many college students use credit cards responsibly. Andrew Merki, chairman of student consumer advocacy organization the Indiana Public Interest Research Group, notes that some of his classmates use cards for necessary items like textbooks. But consumer advocates say the new credit card rules will protect young consumers by cutting down on unfair or pushy practices.
Under the new rules, credit card companies will no longer be able to give out free gifts in exchange for filled-out credit card applications.
"This is going to make it somewhat less likely that students that are not ready for credit will be tempted into it by easy access or freebies," says Gail Hillebrand, senior attorney for the nonprofit advocacy group Consumers Union, publisher of Consumer Reports magazine. In addition, card issuers will be required to disclose any marketing contracts they have with colleges.
A second big change could prove trickier. Americans under age 21 will be required to prove they have a source of income to pay off any charges, or will need to get a co-signer before they can get a card.
The new rule gives parents a chance to say "no" and teach kids a lesson about money, spending and personal responsibility, says Susan Beacham, chief executive of Money Savvy Generation, which teaches parents on how to talk to their kids about money.
A co-signer -- whether it's a parent or an older friend -- is "agreeing to take personal responsibility for the debt the child incurs," notes Beacham.
That means the cosigner's credit score can get dinged if the cardholder does not pay his or her bills on time. "We don't need to do that to ourselves or give our children that ability."
Hillebrand says she's concerned that students will simply ask older friends or romantic partners to cosign for them.
"Even for adults, it's hard to understand that a single mistake can stay on your credit for seven years," she says, noting that a low credit score can make it more expensive -- or impossible -- to get a loan. "They could sign away their futures."
As an alternative, parents can set up checking accounts for their kids, or get them a debit card that is tied to a pre-funded account. Once the young adult has demonstrated that he or she can be responsible with money, credit card talks can begin.
Then there is the argument that an 18-year-old needs a credit card to build up his or her credit history, in order to qualify for loans in the future. Consumer advocates say it's fine to wait until the consumer is 21, because it takes just six months to a year of credit card usage to build up enough history to develop a score. "There is plenty of time to do that," says Hillebrand. "It's better to have a thin credit record than a crushing debt load."
The average college senior had credit card debt of $4,100 in 2008, up from $2,900 in 2004, according to a Sallie Mae survey. Credit card companies expect young consumers to stay loyal to the first credit card brands that make it into their wallets. The card issuers sometimes get data on students directly from colleges, for a fee.
Students can end up with cards with very high interest rates or big fees that can make it easy to accumulate a lot of debt. The average college student is already awash in credit. Most have four or more cards, and only 17 percent said they always pay off their balances every month, according to Sallie Mae.
Of course, many college students use credit cards responsibly. Andrew Merki, chairman of student consumer advocacy organization the Indiana Public Interest Research Group, notes that some of his classmates use cards for necessary items like textbooks. But consumer advocates say the new credit card rules will protect young consumers by cutting down on unfair or pushy practices.
Under the new rules, credit card companies will no longer be able to give out free gifts in exchange for filled-out credit card applications.
"This is going to make it somewhat less likely that students that are not ready for credit will be tempted into it by easy access or freebies," says Gail Hillebrand, senior attorney for the nonprofit advocacy group Consumers Union, publisher of Consumer Reports magazine. In addition, card issuers will be required to disclose any marketing contracts they have with colleges.
A second big change could prove trickier. Americans under age 21 will be required to prove they have a source of income to pay off any charges, or will need to get a co-signer before they can get a card.
The new rule gives parents a chance to say "no" and teach kids a lesson about money, spending and personal responsibility, says Susan Beacham, chief executive of Money Savvy Generation, which teaches parents on how to talk to their kids about money.
A co-signer -- whether it's a parent or an older friend -- is "agreeing to take personal responsibility for the debt the child incurs," notes Beacham.
That means the cosigner's credit score can get dinged if the cardholder does not pay his or her bills on time. "We don't need to do that to ourselves or give our children that ability."
Hillebrand says she's concerned that students will simply ask older friends or romantic partners to cosign for them.
"Even for adults, it's hard to understand that a single mistake can stay on your credit for seven years," she says, noting that a low credit score can make it more expensive -- or impossible -- to get a loan. "They could sign away their futures."
As an alternative, parents can set up checking accounts for their kids, or get them a debit card that is tied to a pre-funded account. Once the young adult has demonstrated that he or she can be responsible with money, credit card talks can begin.
Then there is the argument that an 18-year-old needs a credit card to build up his or her credit history, in order to qualify for loans in the future. Consumer advocates say it's fine to wait until the consumer is 21, because it takes just six months to a year of credit card usage to build up enough history to develop a score. "There is plenty of time to do that," says Hillebrand. "It's better to have a thin credit record than a crushing debt load."
Credit Debt Consolidation Via Credit Counseling
People today continue to struggle with credit card debt, but why? There are many ways to help your financial situation. Credit card debt consolidation without damaging your credit long term, without bankruptcy is one way. Lower your interest rates and maintain your credit card payments on a monthly basis without actually having to call your credit card companies. Consumer credit counselors will work with your creditors and help you obtain an interest rate that's manageable. Sick of paying 24% for a loaf of bread you bought two months ago. Consumer credit counseling helps you lower your rates to where you can see the light at the end of the credit tunnel.
Credit Card Debt Consolidation - Did YOU know?
Did you know that paying your credit card earlier than the due date will help you save money? It's true. Credit Card companies charge interest on a daily basis, so cardholders who carry a balance from month to month will actually pay more over the long run. For Example, if you carry a balance of $10,000 at 18% and make a minimum payment of $350, which is the typical minimum needed by the credit card industry at 3.5%. And you wait until the last day to make the payment you are being charged interest of $9,989, but if you make the payment on the 2nd day of the billing cycle you are paying 18% on $9,661. This will save you around $60 a year, or enough to buy a combo meal a month.Credit Card Debt Consolidation by Debt Settlement Part 2
If you are like most consumers out there and just want out of the debt without the hassle of dealing with interest rates, you should look into debt settlement. Yes, debt settlement does have a negative feel to your credit, but when you are able to obtain financial freedom, is there really a price behind it? Or like in the commercials…its priceless!! I think debt settlement is one of the most under rated ways to help eliminate consumer debt in the market today. We had a client who owns his own garage business and was paying upwards of 25% on a daily basis to keep it open. He turned his debt over to us and we were able to keep him in business and settle his debt for 24% of what he actually owed the creditor. By the way, we still get our cars serviced at his garage.Recurring charges follow your cards
If you have ever purchased an Entertainment Book, you need to listen to Trudy Fletcher's story.
Advertisement
The Entertainment Book is a compilation of discount and 2-for-1 coupons that are valid during the year.
The 2010 Entertainment Book for Fort Myers and Naples is now on sale for $35. According to the Web site ad, it contains more than $15,000 in local savings on dining, attractions and shopping.
Fletcher purchased an Entertainment Book in 2007 on an automatic renewal plan. Every year, she would be shipped a new one.
But Fletcher wasn't pleased with the 2009 book.
"This past year I found the book totally unhelpful and decided I would not get one for the upcoming year," Fletcher said.
She received two notices from Entertainment Publishing, telling her the credit card number it had on file was no good, and if she wanted to continue to receive the book, she should contact them.
The credit card account Fletcher used two years earlier was no longer valid. But because she didn't want the Entertainment Book anyway, why bother to contact the company because it didn't have her new account number?
Because, it turns out, Entertainment Publishing would charge her anyway, as Fletcher discovered when she saw a charge on her credit card for the 2010 Entertainment Book.
"I immediately called the company ... and said I didn't want the book and asked how the company got my credit card number since the one they had on file had been cancelled," Fletcher said. "I was told that the ... company will research to find new credit card numbers as long as the customer still has a credit card with the same bank."
OK, did you get that? Is your jaw dropping the way mine did?
How did this happen and who authorized it?
I called Entertainment to see if the company knew, and although in a statement the company apologized for any inconvenience this caused Fletcher, they provided no answers about how the charge got on her account.
"We are currently looking into Trudy Fletcher's specific incident to clarify what might have occurred," the statement read. "We will work with her directly to resolve this matter."
I'm translating that as, "It's none of your business."
It was Bank of America, where Fletcher has her Visa card account, that solved this mystery for me.
"If a transaction is flagged as a recurring charge and an authorization comes in on the old card, the transaction will be approved and then posted to the new card," spokeswoman Christina Beyer wrote.
There's two lessons to be learned from this tale.
First, closing a charge account obviously is not enough when you want to cease doing business with a vendor. You have to contact them and get them to stop billing you and sending the merchandise.
Second, avoid automatic purchase programs and subscription services that allow vendors to charge your credit card or withdraw money from your checking account.
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The Entertainment Book is a compilation of discount and 2-for-1 coupons that are valid during the year.
The 2010 Entertainment Book for Fort Myers and Naples is now on sale for $35. According to the Web site ad, it contains more than $15,000 in local savings on dining, attractions and shopping.
Fletcher purchased an Entertainment Book in 2007 on an automatic renewal plan. Every year, she would be shipped a new one.
But Fletcher wasn't pleased with the 2009 book.
"This past year I found the book totally unhelpful and decided I would not get one for the upcoming year," Fletcher said.
She received two notices from Entertainment Publishing, telling her the credit card number it had on file was no good, and if she wanted to continue to receive the book, she should contact them.
The credit card account Fletcher used two years earlier was no longer valid. But because she didn't want the Entertainment Book anyway, why bother to contact the company because it didn't have her new account number?
Because, it turns out, Entertainment Publishing would charge her anyway, as Fletcher discovered when she saw a charge on her credit card for the 2010 Entertainment Book.
"I immediately called the company ... and said I didn't want the book and asked how the company got my credit card number since the one they had on file had been cancelled," Fletcher said. "I was told that the ... company will research to find new credit card numbers as long as the customer still has a credit card with the same bank."
OK, did you get that? Is your jaw dropping the way mine did?
How did this happen and who authorized it?
I called Entertainment to see if the company knew, and although in a statement the company apologized for any inconvenience this caused Fletcher, they provided no answers about how the charge got on her account.
"We are currently looking into Trudy Fletcher's specific incident to clarify what might have occurred," the statement read. "We will work with her directly to resolve this matter."
I'm translating that as, "It's none of your business."
It was Bank of America, where Fletcher has her Visa card account, that solved this mystery for me.
"If a transaction is flagged as a recurring charge and an authorization comes in on the old card, the transaction will be approved and then posted to the new card," spokeswoman Christina Beyer wrote.
There's two lessons to be learned from this tale.
First, closing a charge account obviously is not enough when you want to cease doing business with a vendor. You have to contact them and get them to stop billing you and sending the merchandise.
Second, avoid automatic purchase programs and subscription services that allow vendors to charge your credit card or withdraw money from your checking account.
With credit tight, borrowers turn to peers
With banks tightening their lending standards and credit card companies raising interest rates, borrowers are increasingly turning to an unusual source of money: other people.
Despite a recent regulatory hurdle, websites that facilitate peer-to-peer lending, in which people--often strangers -- lend money to each other with no involvement from a bank, are growing in popularity. Borrowers usually get loans with lower rates than they would from banks or credit cards, while investors often get higher returns than they would from traditional bank products such as certificates of deposit.
Analysts expect the industry to grow as customers who face rising credit card rates search for new ways to refinance their debt. Many investors, meanwhile, have lost confidence in the rocky stock market and have sought other places to park their cash. Membership in peer-to-peer lending groups is climbing fast, and so is the money involved. About $282 million US in peer-to-peer loans were made in 2006, according to Celent, a Bostonbased research firm. By 2010, the firm expects such loans to grow to $5.8 billion.
The industry has gained so many followers that the U. S. Securities and Exchange Commission last year ruled that companies engaging in peer-to-peer lending must register with the agency because the loans are considered securities. After temporarily suspending their operations for several months, Prosper and Lending Club completed its registrations. Loanio and IOU Central have filed their papers, an SEC spokesman said. Others are expected to follow.
"With this credit crunch, the timing couldn't have been better for this industry to really gain a foothold and grow," said Curtis Arnold, founder of CardRatings.com and co-author of the Complete Idiot's Guide to Person-to-Person Lending. "It offers a viable option for folks who are getting turned down for credit elsewhere. There's a lot of people fed up with banks. From the investment side, that is intriguing. When you can get nine to 10 per cent returns in this market . . . that's pretty amazing." Since registering with the SEC in October, Lending Club has gained 300,000 members. In January, it oversaw$1.8 million in loans. Last month, $3.4 million in loans were made.
Between the time it launched in 2006 and registered with the SEC in July, Prosper has grown to 850,000 members and facilitated $180 million in loans.
Officials at the lending sites said much of their increased traffic has come from borrowers whose interest rates on their credit cards have spiked. Card issuers have been raising rates in anticipation of a new law, set to take effect in February, that could hinder rate increases. During the housing boom, many consumers were able to get out of their card debt through home-equity lines of credit. But home values have plummeted in many areas, leaving borrowers without a source of money they once fell back on. About 50 per cent of Prosper's loans go to borrowers trying to consolidate credit card debt, said Chris Larsen, Prosper's chief executive. Prosper's loans can come with interest rates as low as four per cent. "With their credit card debt, it could take 20 years to pay it off," Larsen said.
Other peer-to-peer lending sites operate differently. Prosper allows lenders to bid on the interest rates for borrowers, which results in low-rate loans. Virgin Money codifies loans between friends and families. Other companies specialize in particular types of loans. TuitionU, for example, helps students get loans to pay for school.
The sites typically vet borrowers by pulling their credit reports and requiring minimum credit scores. But the loans do not come without risk. Lending Club's borrowers have a default rate of about three per cent. Prosper's default rate is about five per cent. If a borrower misses payments, the sites report him to credit bureaus. Officials at the sites point out that credit card default rates are in the double digits.
Still, Mark Schwanhausser, a research analyst at California-based Javelin Strategy and Research who has studied peer-to-peer lending sites, said investors should be vigilant for signs that borrowers are struggling to repay their loans.
"It's not a 'buy it and tuck it away' kind of thing," he said. "I think you want to pay attention."
Victim comes face-to-face with identity thief
Was it fate that brought the thief to her that day? Hubris? Malice perhaps?
It was impossible to know. Yet there was Michelle McCambridge, a 23-year-old J.C. Penney sales clerk, looking at the woman who not long before had stolen thousands of dollars worth of jewelry, video-game consoles and other merchandise by claiming to be Michelle McCambridge.
It was impossible to know. Yet there was Michelle McCambridge, a 23-year-old J.C. Penney sales clerk, looking at the woman who not long before had stolen thousands of dollars worth of jewelry, video-game consoles and other merchandise by claiming to be Michelle McCambridge.
As their eyes locked, McCambridge felt herself go numb, a mix of adrenaline and anger. The woman in front of her stood impassively.
"Oh my god, I can't believe it's her, I can't believe she's there," McCambridge recalled thinking. "I remember wanting to go and knock her out myself."
The odds of an identity thief trying to pull a scam that involves one of her own victims must be 1 million to 1, federal authorities said. But in this case, McCambridge not only clued into the doppelganger, but her quick response helped topple an identity theft ring that had targeted more than 40 victims around Washington.
"These are some of the most difficult cases to work because they're so ... time-consuming. But when Michelle recognized her and pulled the (store surveillance) video, it gave us a fighting chance," said Joseph Velling, the special agent for the Social Security Administration who led the investigation.
Identity theft is one of the fastest-growing frauds. In 2008, the Federal Trade Commission received 313,982 complaints. But law enforcement authorities said that an estimated 65 percent of identity theft victims, probably mindful of the dismal odds of catching the culprit, never even call police.
McCambridge's difficulty started in January when the sociology student received a call from her mother asking about several credit card bills. McCambridge didn't know what her mother was talking about. The charges came from stores at which McCambridge had never opened an account.
"She said, 'You have a bill from Sears here.' She opened it and it was for several thousand dollars worth of jewelry.
"Then she called me back a few minutes later. 'What about Kohl's?' And then there was J.C. Penney, Toys-R-Us, Babies-R-Us. Those were all on the same day. I didn't get a statement from them. It was like, 'Congratulations, here's your new card.' "
Someone who produced a driver's license with McCambridge's name on it and who knew her Social Security number had taken out lines of credit at all the stores within just a day or two in December.
There were four $500 gift cards purchased at Penney's and others from Home Depot - about $13,000 worth of gift cards and merchandise in all.
McCambridge immediately called the retailers to report the fraud. She asked the Penney's security department to pull the surveillance recordings for the date that the identity thief had come in to apply for credit. She made similar requests to the other stores the next day.
When Velling, a friend of her father's, looked at the videos, he noticed they had one thing in common: a young black woman with distinctive, heavy-framed rectangular eyeglasses, a high forehead, a small waist and large hips.
McCambridge studied the still photographs that Velling had compiled.
Before the advent of digital video, stores routinely taped over their surveillance footage every 30 days. Even now, however, victims rarely call retailers to request the images; neither do police, who often must try to trace a single case of credit fraud that is rooted in a ring operating in several cities.
That task has become even more difficult as identity thieves become more sophisticated.
"The credit card companies have eliminated a lot of the ways that (security) can be compromised," Velling said. "But there's a huge problem now, and that's instant credit. You get in-store credit and you've defeated all the ... security. But it means you've got to move fast, because the credit card's going to get mailed to the victim, and they're going to know about it in three or four days."
The woman standing at McCambridge's cash register a few weeks after the surveillance photos had been obtained was applying for instant credit to purchase several garments under a different name. "She said, 'I want to apply for one of your J.C. Penney cards. How does that work, and what do you need?' " McCambridge recalled.
And that struck her as strange. Most of the time it's the clerk pushing instant credit on the customer, not the other way around.
"I said, 'We just need your ID and for you to fill out the application.' I went to grab it and, at that point, I really looked at her. I was thinking, 'You have exactly the kind of black-frame glasses as the woman in the picture ... the exact same high forehead.'
"I started getting this fishy feeling in the pit of my stomach. Then I looked over the counter, and she had the exact same body shape as the woman in the picture."
McCambridge raised her hand to cover her badge so the woman wouldn't see her name, and then excused herself to go to another cash register, where she called security. The woman, appearing antsy, made a phone call, and a manager was sent out to take her credit application while store surveillance cameras zeroed in on her.
The suspect produced a fake driver's license bearing the name of a woman whose purse had been stolen from her car a few days earlier. She also had the woman's checkbook. The Penney's manager kept her talking for a while, but she left before Tukwila police arrived.
While scanning surveillance videos from parking lots of the stores where McCambridge's identity was used, Velling and his partner, Special Agent Matt Lavelle, had noticed many showed the same black Cadillac Escalade - prompting them to suspect the work of a single ring.
They started comparing them to other identity fraud cases working their way through the courts. Lavelle was looking over one of them - a man who had tried to open a fraudulent instant credit account at a Kohl's store in February - when he recognized the name of a woman from a previous case he had been involved in.
Going back to that identity theft, the agents started tracing all the suspects connected to the case.
"Buried within one of those old police reports was the name of a woman, Stephanie Locke, and we requested her booking photo. It matched the video we had from the identity theft of Michelle McCambridge," Velling said.
Finally, the mysterious woman in the rectangular glasses had a name and an address.
In the end, Locke and four others were indicted by a federal grand jury. Locke pleaded guilty in June in U.S. district court in Seattle to bank fraud and Social Security number misuse. She faces up to 35 years in prison when she is sentenced this month.
Two other defendants also have entered guilty pleas.
Federal agents still haven't answered the question of how the ring obtained McCambridge's identity to begin with and who produced the high-quality documents that managed to fool so many retailers. That investigation is ongoing, they said.
Velling said identity theft victims must do more than report the fraud to the banks or department stores and put an alert on their credit report. As McCambridge did, they need to ask stores to hold video surveillance of the transactions for police.
"I'm still trying to figure out how they did it. I mean, I understand how they got the other woman's Social Security number - they stole her purse. But how did they get mine?" McCambridge said.
"And then she walks in the store like that? The whole thing is just completely unbelievable," she said. "I feel like I should go buy a Lotto ticket or something. Really, what are the chances that something like that's going to happen?"
Sunday, September 27, 2009
Credit card scammers covet 3-digit security code
Credit card scams are nothing new, but here's a new twist on them. In this case, scammers already have your credit card information, but need the card's security code, the three-digit number located on the back of your credit card a vendor uses to ensure the card's actually in your possession.
Here's how the scam works. Someone calls you claiming to be from your credit card company's security and fraud department. The caller already has your credit card number by some form of identity theft. He or she may provide a badge number and tells you your card's been flagged for unusual purchasing activity.
The caller recites your address and asks you to verify it so a statement can be sent showing your account was credited. He or she also states a fraud investigation will be started, tells you to call the 800 number on the back of your card if you have questions and gives you a six-digit control number to refer to.
Finally, the scammer needs to verify the credit card is in your possession and hasn't been stolen and asks you to recite the three-digit security number on the back. Once read, the caller thanks you, asks if there's anything else he or she can do and hangs up. Sounds harmless, right?
Unfortunately, now the scammer has your verified address and credit card's security code.
The Better Business Bureau advises the best protection against schemes like this is to always verify the legitimacy of requests for personal information. While you may be asked to confirm your identity, your credit card company won't ask you to verify information it has on file, disclose security codes or prove the card is in your possession.
Financial counselors 'overwhelmed'
Val Sherwood has seen it all when it comes to people in financial crisis because of overwhelming credit card debt.
From the college student with $50,000 in credit card bills to the retired senior whose minimum credit card payments exceed his Social Security income, people of all types have come seeking help from Sherwood and the financial counselors at Consumer Credit Counseling Service of the Central Southern Tier, where Sherwood is branch manager. The office is at the Metrocenter, Binghamton.
"I have two full-time counselors," Sherwood said. "Each does seven to eight appointments a day, and we are booked out for 10 days. It's overwhelming."
But starting Feb. 22, new marketing restrictions and other rules will take effect that aim to result in fewer plastic-driven shopping sprees for consumers below the age of 21.
Under the new rules, credit card companies will no longer be able to give out free gifts in exchange for filled-out credit card applications. Card issuers will be required to disclose any marketing contracts they have with colleges. And Americans under the age of 21 will be required to prove they have a source of income to pay off any charges, or will need to get a co-signer before they can get a card.
Consumer advocates say the rules should help bring down credit card debt among students, who by the time they are seniors in college, on average had balances of $4,100 last year, according to a Sallie Mae survey. That's up from $2,900 in 2004.
Most have four or more cards, and only 17 percent said they always pay off their full balances every month, according to Sallie Mae.
"These new rules are long overdue," Sherwood said. "It's going to protect them in the long run from getting in over their head because it happens really quickly."
And it's not just people who are simply spending too much on "wants" versus "needs," she said.
"We are hearing more and more from people of all ages that it's simply the cost of living is increasing so fast," Sherwood said. "They are not getting raises substantial enough to take up that slack. I have elderly folks who are trying to choose between buying food and buying medicine."
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